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What changes should an NRI make to his portfolio after LTCG tax?

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portfolio after LTCG tax

I am an NRI. It has been 14 months since I started investing in mutual funds (Rs 2,000 each in ABSL Frontline Equity Fund, Franklin High Growth Companies Fund and Kotak Emerging Equity Fund). Two months ago, I increased my investment by Rs 3,000, using Top Up facility in BSL Frontline Equity Fund and Franklin High Growth Companies Fund. I have a long term horizon of over 10 years. So, in view of the 2018 central budget (taxation) what changes I should make to my portfolio?
--Vivek Das

Puneet Oberoi, Founder, Excellent Investment Advisors, responds:

As you have written that you have long term planning of 10 years , you should not be worried about the taxation part. We don’t know what all changes will come across in nine more budgets. In fact, what we have to see is which asset class will generate maximum returns and provide the benefit of compounding.

Every asset class is taxable. Take a look below:

Fixed deposits: Income is taxable as per your tax slab (minimum 10 per cent and maximum 30 per cent)

Gold: taxable

Real estate: taxable short term up to 3 years income is taxable and long term gains in more than 3 years are taxed at 20 per cent with indexation

So, there is no product which is tax-free except PPF, which has its own limitations.
We should look at which product gives you the maximum post tax returns, which at present is mutual funds.

Continue with your existing funds, but review your portfolio periodically. Moreover, check whether these investments will be sufficient to meet your goal.

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