Managing rebalancing costs
The HinduSystematic investment plans make the process of investing in equity funds easy. Diverting SIP Rebalancing goal-based portfolios typically involves selling some units in equity funds and investing proceeds in bank deposits. If equity investments are held for more than a year, you must pay long-term capital gains tax should capital gains exceed ₹1.25 lakh in a financial year. Capital gains tax If you sell investments held for less than one year, you must pay short-term capital gains tax of 20% and incur a penalty levied by the asset management company for redeeming units within one year from the date of investing. Instead of selling units for ₹3 lakh, you can keep the unrealised gains and divert the intended equity SIP to a recurring deposit for 10 months.
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