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Vansh Chopra· 8 years ago
Making finance and business topics easier to understand through practical, well-researched, and reliable insights.

How stock investors can reduce the impact of LTCG tax?

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Replying to the question above
Answered on05/12/26

Investors usually try to reduce Long Term Capital Gains tax impact through strategies like tax harvesting, holding investments longer, using exemptions wisely, or balancing profits with losses. Many people also prefer tax-efficient investment structures or spread redemptions across financial years. The exact impact depends on changing tax rules and individual income situations. Some investors panic too much about taxes and end up making bad investment decisions. Honestly, paying some tax on profits is still better than having no profits at all. Long-term investing discipline usually matters much more than trying to avoid every small tax liability.

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Ved Tiwari
Two decades of chartered accountancy — turning complex financial and business realities into writing that professionals and decision-makers can actually use.
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Ved Tiwari is a Chartered Accountant (CA) and finance writer with over 20 years of professional experience in taxation, auditing, financial planning, and business advisory. He is a Fellow Member of the Institute of Chartered Accountants of India (ICAI) — one of the most rigorous professional qualifications in Indian finance — and holds a Bachelor of Commerce (B.Com Honours) from Shri Ram College of Commerce (SRCC), Delhi University. His content covers personal finance, corporate taxation, GST, investment strategy, business compliance, financial planning, and India's evolving regulatory and economic landscape. His work has appeared on platforms including Moneycontrol, The Economic Times Wealth, and CA Club India, where he writes for finance professionals, business owners, and informed readers who need content built on two decades of real-world financial practice — not surface-level commentary. Over 20 years, Ved has advised hundreds of businesses and individual clients on taxation, audit compliance, and financial restructuring. He has handled complex multi-crore audits, represented clients before tax authorities, and guided startups and established firms through India's regulatory environment. He has published 400+ articles on finance and business, spoken at ICAI seminars and industry finance conferences, and is a practising member of the ICAI Western Region chapter. Across all his writing, every figure is verified, every regulatory reference is current, and every recommendation reflects the same professional standard he applies to his clients — because in finance, accuracy is not optional.

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Replying to the question above
Updated on05/21/26

LTCG tax is another evidence how government failed in its union Budget 2018 to appeal different sections of the society. The investors are miffed over the restoration of this long-term capital gains tax, which could significantly reduce the return from stocks held for the long-term. What’s worse is that while government will get 10 percent of your returns, you could end up paying as much as 40 percent if you’re not careful about how you’re investing. Also, let’s not forget that no inflation indexation is allowed here, which makes the tax totally unfair.

If you’re an investor, there’s very less you can do now. You just have to come up with smarter ways to minimize the impact of LTCG tax and keep your returns high.

First, start by trading less frequently. Don’t buy and sell every so often. Be a holder. This is easily possible and less-risky if you pick the right stocks that have higher sustainable value. Second, don’t invest in equities directly. Enter the market through mutual funds, which could reduce the taxable events. While Mutual fund investors are still confused about the LTCG tax calculation, as we move forward, things would become much clearer. And third, take hands of an expert if you’re in the stock market all alone. LTCG tax can totally change the game for the investors who are not smart. So having a professional by your side could ease thins up for you.

Prreeti Radhika Taneja
Prreeti Radhika Taneja
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