How to avoid LTCG legally

Govt announced 10% LTCG tax on equity. Downer. Bummer.

You can legally avoid LTCG by living in or forming a company in 0% Tax Haven AND not investing in India instead choose from 80+ other developed or emerging or frontier countries which charge 0% LTCG on foreigners.   For HNIs the option of investing overseas makes more sense.

Only companies growing above 20% will be attractive compared to 15% growing elsewhere. Even though 10% rate is not high I and most salaried people in India or New Zealand or the US pay higher rate, there will be inertia to invest for the foreigners and Indian companies will have to be 30% more attractive than the equivalent foreign companies to offset mental hurdle of 10% if you involve human psychology.

Tax losses can now be carried forward for 8 year and after a massive bear market Govt. will earn nothing from the investors for a prolonged period of 3-6 years.

Software companies will make some money fixing accounting software this year.

There is a last way to avoid LTCG, by never selling shares, holding stocks in perpetuity, it’s theory not practice, as the churn is 100%. That does make bitcoin a little bit attractive this week 🙂