Know how you will lose 35 lacs if you are buying NHAI or REC bonds or investing in property just to save capital gain of 1 Crore
Selling your property and having capital gains of 1 crore? Planning to invest in NHAI / REC bonds or buying another property just to save tax of 20 lakhs? Do not do that. You can earn 35 lacs extra even after paying 20 lacs as Tax. Know how
Most people who do not want property land up buying one just to save capital gain Tax Property gives rental of hardly 2% and 2% appreciation Further, the funds blocked are not liquid and there is lock-in period of 5 years as per Income Tax Act
Similarly, many people buy NAHI / REC bonds to save capital gains tax Bonds give just 5% returns Further, the funds blocked are not liquid and there is a lock-in period of 5 years as per the Income Tax Act
In the above example of 50 Lacs invested in property and bond each, it shows that by paying tax of 10 Lac each (total 20 Lac) and investing in MF the surplus income is approx. 35 Lacs
If you pay tax of 20 lakhs and free your 50 lakhs investment in bonds and 50 lakhs investment in property. Invest 1 Crore in good equity oriented MF you will earn 35 Lakhs more at the end of 5 years
Though MF are subject to market risk, however, if the investment is for 10 years plus, the probability of getting 12% returns is high.
PS : You should always take professional help before implementing any advice