New Delhi, Oct. 26 -- Some wealthy investors raise money without selling shares that have gained value. Instead, they borrow against those shares, delaying the capital gains tax that would be triggered by selling.

Globally, this practice is called Lombard lending, a product rooted in private banking. In India, similar products are called loans against shares or securities.

Investors pledge their shares to a bank or a non-banking financial company. The shares remain in their names, allowing them to retain dividends and voting rights.

Borrowing itself does not constitute a sale, so capital gains tax is not triggered. However, the loan must eventually be repaid, along with interest.

Lenders generally offer loans worth around 50% to 60% o...