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Real estate versus a mutual fund: Indian tax anomalies have warped this choice. Parity please

India's tax code unfairly favors real estate over financial assets regarding capital gains. While reinvesting home sale proceeds avoids tax, switching financial assets like mutual funds incurs it, hindering market efficiency. This disparity discourages financial savings and optimal investment reallocation. The author proposes extending the tax rollover benefit to financial assets, taxing only at final exit. To compensate for revenue loss, taxing farm income and cutting subsidies are suggested. This reform aims to channel more savings into productive financial markets, encouraging growth and investor liquidity, addressing a critical anomaly in India's financial system.

LiveMint · Vidya Mahambare · Sep 10, 2026 at 10:30 AM

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