Can SWPs from mutual funds support home loan payments? Key insights from industry expert on cap-ital gains tax relief
New Delhi, Aug. 10 -- Many homebuyers exploring tax-efficient financing options often ask whether Systematic Withdrawal Plans (SWPs) from long-term mutual funds or stocks can be used for monthly home loan payments. Cleartax founder and chief exec-ut-ive Archit Gupta provided cautions against this strategy.
According to the industry expert, many borrowers continue their SIPs and use monthly SWP with-draw-als to repay loans instead of liquid-ating their entire invest-ment port-fo-lio upfront. While this may appear convenient, it poses structural risks under Section 54F of the Income-tax Act and complicates compliance.
Tax law treats each SWP payout as a separate sale transaction, creating multiple tax events. This fragmentation can confli...
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