Pledging Liquid Funds

I want to know if pledged liquid funds are entitled for LTCG and indexation benefits if pledged for more than 3 years.

You can take two views:

  1. Since the ownership remains with you, you will be entitled to avail the LTCG indexation benefits. In case your ITR is scrutinized, the assessing officer may want to confirm the reason the units have left your account but you’ve not accounted for it as a sale transaction. You can explain that you’ve pledged these units for margin benefit. The AO may or may not agree with your treatment and may ask you to compute your returns differently.
  2. Since the units have moved out of the account, you won’t be able to avail indexation benefits.

Best to consult a CA.

I think from next month they will remain in same account even after pledging so there should be no problem.


Is this some new feature coming next month?

Thank You !!