Your handy guide to a post-Budget portfolio rejig

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Mint. However, this does not mean investors should sink into a morass of melancholy. “While this shift may occur gradually, investors should consider strategies to mitigate the impact.

These include focusing on tax-efficient investments such as ELSS funds, which offer benefits under Section 80C, adjusting holding periods to optimize tax liabilities, and diversifying across asset classes and geographies to spread risk. “Additionally, investing in Alternative Investment Funds (AIFs) could be considered, as their potential for higher growth might help offset increased tax burdens," he added. Similarly, the removal of indexation benefit on property sales induced a collective groan from real estate investors, particularly those looking to sell older houses as they could be staring at a huge jump in their tax bill.

But barring these cases, there could be a silver lining for the overall financial services sector. “Taking away the indexation perks in real estate, which let people adjust the purchase price for inflation, could push investors to look at other options like stocks and bonds. This change might make the market more liquid, help people spread out their investments, and boost the economy," said Ravi Singh, senior vice president, retail research, Religare Broking.

“Stocks can bring in more money, while tax-free bonds give steady returns with less tax to pay. Other choices like mutual funds, Reits, and InvITs give people a mix of chances to invest," he added. It is important to note that there is no change in the income tax laws’ provision under which capital gains from real estate asset sales are tax exempt if the gains are reinvested in a residential property.