Ch.8 · Dividend and STT Taxation · hard
What is the 'tax-efficient sequence' for withdrawals from an equity mutual fund portfolio in retirement?
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EXPLANATION
Tax-efficient withdrawal planning involves using SWP structured to keep annual LTCG within the ₹1.25 lakh exemption. For example, if a retiree needs ₹5 lakh/year and the portfolio cost basis allows ₹1.25 lakh of LTCG-free redemption, they should plan withdrawals accordingly. Switching to IDCW is less efficient as dividends are taxed at slab rate, not the concessional 12.5% LTCG rate.
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