{"id":1075,"date":"2024-04-22T09:44:50","date_gmt":"2024-04-22T09:44:50","guid":{"rendered":"https:\/\/jamawealth.com\/askguru\/?p=1075"},"modified":"2026-03-02T19:28:29","modified_gmt":"2026-03-02T19:28:29","slug":"is-it-a-good-idea-to-keep-redeeming-mf-every-year-to-buy-an-elss-to-avoid-ltcg","status":"publish","type":"post","link":"https:\/\/maxiomwealth.com\/askguru\/2024\/04\/22\/is-it-a-good-idea-to-keep-redeeming-mf-every-year-to-buy-an-elss-to-avoid-ltcg\/","title":{"rendered":"Is it a good idea to keep redeeming MF every year to buy an ELSS to avoid LTCG?"},"content":{"rendered":"\n

This is a good thought! You can in fact optimise the tax outgo to some extent by redeeming an Equity Mutual Fund. This is not restricted to ELSS<\/a> funds per se, and is applicable to any Equity Mutual Fund.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Since April 2018 the tax rules have brought back Long Term Capital Gains on equities. The means that any gain you make after one year has to incur LTCG of 10%. There is an exemption on the gain of first one lakh.<\/p>\n\n\n\n

So you could redeem the fund after one year, harvest a gain of say one lakh and then reinvest immediately.<\/p>\n\n\n\n

Some Tips:<\/strong><\/p>\n\n\n\n

  1. Doing this with an open ended quite fund is much better as ELSS funds have a 3 year lock in.<\/li>
  2. If your holdings are substantial, you can do this with an ELSS fund too every 3 years. By having minimum 3 such folios you can make this an annual affair.<\/li>
  3. Make sure that you are prompt in the transactions as you would not want to get hit by sudden market movements that may hit you adversely.<\/li>
  4. Going for direct plan mutual funds with a trusted advisor (not the free types) can make this process smooth for you.<\/li><\/ol>\n\n\n\n\n
    \n

    Maxiom Wealth \u2014 Free Tool<\/p>\n

    Maximise Your \u20b91.5 Lakh 80C Tax Saving<\/h3>\n

    ELSS is the only 80C option that also builds long-term wealth \u2014 with the shortest lock-in (3 years) and equity-level returns. See your tax saving and projected corpus with our ELSS calculator.<\/p>\n Calculate ELSS Returns \u2192<\/a>\n Talk to a Financial Advisor<\/a>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"

    This is a good thought! You can in fact optimise the tax outgo to some extent by redeeming an Equity Mutual Fund. This is not restricted to ELSS funds per se, and is applicable to any Equity Mutual Fund. Since April 2018 the tax rules have brought back Long Term Capital Gains on equities. The… Read More »Is it a good idea to keep redeeming MF every year to buy an ELSS to avoid LTCG?<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[38,96],"tags":[],"class_list":["post-1075","post","type-post","status-publish","format-standard","hentry","category-mutual-funds","category-tax-saving-mutual-funds"],"_links":{"self":[{"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/posts\/1075","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/comments?post=1075"}],"version-history":[{"count":1,"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/posts\/1075\/revisions"}],"predecessor-version":[{"id":3683,"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/posts\/1075\/revisions\/3683"}],"wp:attachment":[{"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/media?parent=1075"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/categories?post=1075"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/tags?post=1075"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}