Ltcg be treated as busines income if invested by borrowed mo

Tax queries 154 views 1 replies

I had taken a personal loan from bank for 5 lakhs and invested in mutual fund and plan it to keep it for long term 5 yrs. and more would this gain would be treated as capital gain or business income since investment is made out of borrowed money do i need to show this as a stock in trade or capital asset if stock in trade then whether all my investment in mutual funds other than this loan amount would need to be shown as stock in trade because I m investing since 2010 in mf from my savings and gifts and during previous year before taking loan had sold some units which were filed as ltcg do i need worry about my previous gain as well.

Replies (1)

Mutual Investment cannot be treated as business, specifically when your investment is of Long term nature. So, all the gains will be treated as long term capital gains. If they are equity oriented, then totally tax free after investment of 12 months.


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