While there are countless articles out there on web explaining this topic, there still prevails much confusion, at least among the traders. I mean, mutual fund experts are still not sure how to go about with this LTCG tax. Indeed, in the coming days we will see how the negative impact of this new tax unfolds in the investor community. Right now, there are few steps you can take to minimize its *****.
One, stop trading too many times! A general rule in this game is to never overtrade. Take this rule seriously. Increase your holding period and it will limit the tax incurred on your gains. Second, switch your investment from the regular plans to direct plans (which is very easy to do). This would be extremely effective if you want to hold on your investment for more than one year. Third, instead of equities, chip your money in mutual funds. It would return you just as much return but requires buying and selling less frequently.
These three simple measures can easily help you negate the impact of Long-Term Capital Gain Tax. Perhaps they might only optimize your returns only marginally, but they can save you big if done smartly.