[vijaykr]

Originally Posted by JediKnight

Many people are not aware but you do not have to pay capital gains tax if you invest the money to buy home even for mutual funds.

I am one of those who is not aware of this So how does this work exactly in terms of not paying CG? Unless the amount used for buying a home is coming from another property sale in which case it is straightforward, how do you show that the proceeds from investment used for a home purchase are exempt from capital gains? Thanks

[thanixravindran]

Originally Posted by vijaykr

I am one of those who is not aware of this So how does this work exactly in terms of not paying CG? Unless the amount used for buying a home is coming from another property sale in which case it is straightforward, how do you show that the proceeds from investment used for a home purchase are exempt from capital gains? Thanks

I believe he is referring to Section 54F which gives option of exemption of LTCG from non residential capital assets like land, equity and mutual funds if reinvested in residential property.

Section 54 is for exemption of LTCG from residential property reinvestment to another residential property.

[Dry Ice]

Originally Posted by V.Narayan

Dear @Dry Ice, always pleased to share what little I have experienced. I did not quite understand what is meant by decumulation. If you could clarify I could write on it. Also share a rough idea of your age range (20s, 30s or 40's) to make my response more relevant.

My bad, should have probably expressed it better. DailyDriver has covered the essence of what I meant pretty well. Essentially, planning the draw down phase.

I am in late 30s, so probably 20 odd years to go.

Originally Posted by V.Narayan

And finally my advice to readers would be to donate, lumpsum or in bits, something to a good well run charity. How much is not as important as how willingly we do it with grace and humility. We need to not only lessen the burden of our worldly assets but also the baggage of desires in our hearts and souls.

True

Originally Posted by V.Narayan

The impediments to decumulation are FOMO, a fear that enough is never enough, that we need to prepare for financial armageddon, that the RoI is never good enough and a better RoI is just around the corner. The grip of moh and maya can be very strong and not quite visible to us.

Certainly, that fear is all too prevalent. It’s more of a feeling than fact. The mind always frets about the worst case scenarios.

Originally Posted by V.Narayan

Don't chase perfection of corpus amount or RoI. Chase the minima you need and ensure that is locked in. Rest is a bonus. Long long ago I determined roughly how much I will need as a retiree to live on, added an inflation of 5% per annum, and invested in a series of pension plan annuities with HDFC Life. As my earnings grew I added additional annuities to invest in. Today all but one of those annuities have matured and yield a annual income which will go on for life of both my spouse and me. The return wasn't the best but it was a substantial forced saving each year, non-withdrawable {so no tinkering by me} and now I don't have to bother or manage the corpus. After that all other investments in equity, real estate, mutuals were for the top up corpus.

That’s true, and probably the way to go, instead of trying to maximise returns while excessively hedging against every possible risk. As they say, keep it simple, stupid!

Thanks for sharing!

[JediKnight]

Originally Posted by thanixravindran

I believe he is referring to Section 54F which gives option of exemption of LTCG from non residential capital assets like land, equity and mutual funds if reinvested in residential property.

Section 54 is for exemption of LTCG from residential property reinvestment to another residential property.

Yes that is correct. I was referring to Section 54F. Many people are not aware of this section. So parking funds for a future real estate purchase in a mutual fund is a prudent option and it hedges you against price increase.

[whitewing]

Originally Posted by JediKnight

Yes that is correct. I was referring to Section 54F. Many people are not aware of this section. So parking funds for a future real estate purchase in a mutual fund is a prudent option and it hedges you against price increase.

Could you please eloborate how a LTCG from sale of MF/equity can be transferred into a land/house purchase? If indeed this is possible, it would be an option I would like to explore.
At the time of my last reading of the (sometime last year) Section 54F limits the capital assets to those whose incomes could be classified under "Income from house property".

[tasty911]

Originally Posted by whitewing

Could you please eloborate how a LTCG from sale of MF/equity can be transferred into a land/house purchase? If indeed this is possible, it would be an option I would like to explore.
At the time of my last reading of the (sometime last year) Section 54F limits the capital assets to those whose incomes could be classified under "Income from house property".

Have a look at these:
https://cleartax.in/s/ltcg-tax-savings

https://economictimes.indiatimes.com...8.cms?from=mdr

[tasty911]

Originally Posted by JediKnight

Yes that is correct. I was referring to Section 54F. Many people are not aware of this section. So parking funds for a future real estate purchase in a mutual fund is a prudent option and it hedges you against price increase.

I believe it has to be an equity mutual fund.

[JediKnight]

Originally Posted by tasty911

I believe it has to be an equity mutual fund.

Disclaimer I am not a tax professional/expert so there can be errors in what I am saying.

The law says it can be for any long term capital gain other than a residential property ( for section 54 F). So it can be things like direct equity of hybrid funds etc as long as there is a LTCG. I guess for debt funds purchased before 1st April 2023 you can still use if you have LTCG. But not after that because government got rid off LTCG on debt funds after that.