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Will I Have to Pay Tax on Capital Gains?

T S Khurana

T S Khurana   |434 Answers  |Ask -

Tax Expert - Answered on Feb 20, 2025

A certified management accountant since 1993, T S Khurana is a fellow member of The Institute of Cost Accountants of India. His areas of expertise are income tax, specifically litigation cases, and GST.

Since the last 21 years, he has also been providing expert advice on financial matters, including investments and diversification of funds, and wealth building in the long term to his clients.
He believes that investment in real estate is the safest way for better returns and wealth generation over a period of time.

A former chairman of the Chandigarh Chapter of Institute of Cost Accountants of India, T S Khurana has also served as member of its technical committee.... more
Asked by Anonymous - Feb 20, 2025Hindi
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I bought a flat in 2022 worth 1.35cr and selli g it dor 2.4cr in 2025 and reinvesting thebprofit made which is 1.1cr in buying another independent house worth 1.8cr.. will i have to pay the tax on capital gains?

Ans: You are entitled to avail exemption for your investment in Residential house property & as per data made available, there should not be any LTCG liability in this case. Kindly ensure that, new property is Registered in your favor with in 2 years from the date of Sale deed of your sold property.
Most welcome for any further clarifications. Thanks.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Asked by Anonymous - Apr 04, 2025Hindi
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I can invest Rs 10,000 every month for 10 years. Kindly suggest investing options -- where should I invest? How much wealth can I create after 10 years?
Ans: Investing Rs 10,000 per month for 10 years is a great decision. It will help you build substantial wealth over time. Here’s a detailed assessment of the best investment options and the potential returns you can expect.

Investment Options for Rs 10,000 Per Month
1. Equity Mutual Funds (Actively Managed)
Suitable for long-term wealth creation.

Professional fund managers make investment decisions.

Offers better flexibility compared to direct stock investment.

Can generate high returns over a 10-year period.

Ideal for those who can take moderate to high risk.

2. Debt Mutual Funds
Provides stability to your portfolio.

Lower risk compared to equity mutual funds.

Useful for balancing risk and return.

Returns are better than FDs over a long period.

3. Hybrid Mutual Funds
Invests in both equity and debt.

Suitable for investors looking for stability with some growth.

Balances market volatility better than pure equity funds.

4. Gold Investment (Sovereign Gold Bonds - SGBs)
Offers capital appreciation and fixed interest income.

Safe investment backed by the Government of India.

Can act as a hedge against inflation.

5. Public Provident Fund (PPF)
Tax-free returns.

Provides capital protection.

Best for those looking for safe and guaranteed returns.

Lock-in period of 15 years, but partial withdrawals allowed after 5 years.

6. National Pension System (NPS)
Ideal for retirement savings.

Provides tax benefits under Section 80C and 80CCD.

Investment mix of equity, corporate bonds, and government securities.

Partial withdrawal allowed after a few years.

Suggested Investment Allocation
Equity Mutual Funds: Rs 6,000 per month

Debt Mutual Funds: Rs 2,000 per month

Gold (SGBs): Rs 1,000 per month

PPF: Rs 1,000 per month

This diversified approach helps reduce risk and maximize returns.

Expected Wealth Creation After 10 Years
The wealth you create depends on returns from different assets. Here’s an estimate:

Equity Mutual Funds: Can generate higher returns over 10 years.

Debt Mutual Funds: Provides stability with moderate returns.

Gold (SGBs): Prices depend on market demand and inflation.

PPF: Offers safe and steady returns.

You can expect to build a significant corpus by following this plan.

Why Not Index Funds?
Index funds do not offer active management.

They simply track market movements without strategy.

Actively managed mutual funds can beat index funds over time.

Fund managers adjust portfolios based on market conditions.

Higher potential for wealth creation with actively managed funds.

Final Insights
A mix of equity, debt, gold, and PPF creates a balanced portfolio.

Stay invested for 10 years to benefit from compounding.

Review your investments every year.

Consider increasing your SIP amount whenever possible.

Invest through a Certified Financial Planner for better guidance.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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