ITR filing: Stock market investors can use these tricks to lower income tax outgo
Indian stock market can utilise several income tax planning strategies to increase their returns. Long-Term Capital Gains (LTCG) Tax
In India, long-term capital gains tax applies to gains from the sale of listed equity shares and equity-oriented mutual funds held for more than one year. Mumbai-based tax and investment expert Balwant Jain suggested holding equity investments for at least one year to benefit from the favourable LTCG tax rate of 10%.
“Gains up to ₹1 lakh in a financial year remain tax-exempt," Jain said. Invest in ELSS mutual funds to enjoy potential capital appreciation and tax savings under Section 80C of the Income Tax Act. This helps in reducing taxable income while promoting long-term wealth growth.
Systematic Investment Plan (SIP)
Investing through SIPs in mutual funds allows investors to reduce the impact of market volatility. “Utilise SIPs in equity mutual funds for rupee cost averaging and compounding benefits. As LTCG tax doesn't apply to gains up to ₹1 lakh per year, SIPs are a tax-efficient choice," said CA Sandeep Agrawal, Director and Co-founder at Teamlease Regtech.
Diversify across asset classes for optimal tax efficiency. Sandeep Agrawal advised to consider debt investments like bonds and fixed deposits alongside equities to balance returns and minimize short-term tax liabilities. Explore tax-saving avenues like the Public Provident Fund (PPF), National Pension System (NPS), and Tax-Saving Fixed Deposits.
These options offer deductions and tax benefits while contributing to long-term financial goals. According to CA Sandeep Agrawal, individuals should employ loss harvesting by selling underperforming investments to offset capital gains and reduce the overall tax burden. Choose growth options
. Read more on livemint.com
