I am willing to take that risk. As long as the prices stay within 4-5%, this will work out for me. I will buy on 4th, 5th and 6th March equally. I will not get the same units as the prices will definitely be higher.
The alternative is to just sit tight and pay whatever taxes I have to, on maturity.
Which option is better according to you?
Thanks for the discussion @BB789 @abhiwin123 @cvs
Redeeming seems better for me. 12.5% is 12.5%
Is my buyback approach ok?
Any other option that you can suggest…I want to get back in after booking the profits.
Cheers!
Another alternative is to buy SGBs when they are down (now? next week? next month as per your plan?),
temporarily even increase exposure exceeding your target level of long-term SGB holdings.
This is knowing that you will be liquidating a significant chunk of your overall SGB holdings (tax-advantageous redemption) in the near future (next month as per your current plan).
buy SGBs when they are down (now? next week? next month as per your plan?)
In the short-term, whether this is now or sometime in the near future,
can evaluate the known factors and come-up with a guess that you find comfortable.
I think we all can agree that
while we know of several factors that can drive SGB prices higher and lower,
as we cannot know which of them is going to be a dominating factor that drives SGB prices in future,
we cannot predict SGB prices in the near future.
Can spend time estimating the volumes behind each of these factors,
to be able to better guess which factor(s) would dominate.
IMHO, trying to time SGB purchase, either now or in future is speculation.
Next, i think you’ve spent enough thought and applied regret minimization [1][2].
Having done that, feels fine to go with one’s educated guess.
My personal guess is to buy now/soon, and not wait to sell and only then buy later.
Gold is in a period of volatility… It’s hard to predict where it’ll go. If you believe it’ll go up from here, buy on dips, spread over a period of time, instead of trying to buy on the same 3 days.
I will be buying other SGBs as and when I can. That is a separate transaction.
I just want to bring my cost up to current prices for these particular SGBs and not pay taxes on the gains.
I am only concerned about switching the SGBs without a significant difference between my redemption price and my new purchase price. I also understand that I will have to pay a premium on the new purchase.
Cheers!
I did this rough calculation considering my actual cost of aquisition.
According to my calculation, this fails if I get the new SGBs 10% above the redemption price.
I can always check which SGBs are trading close to their Fair Value and buy those near the redemption day.
And who knows, the way things are going, there might not be an LTCG in 2028 and I might have to pay the taxes on my slab rate.
Please check and see if there is any mistake in my calculation.
@cvs @BB789 @abhiwin123
Thank you all for helping. If you guys don’t see any mistake here, I have decided to go ahead and go for early redemption.
How take amounts and own prosess do
