Monday morning. Friend's text. Wants to redeem his MF tomorrow. 360 days since the cheque cleared. I asked one question. Then told him to wait six days.
"Why six days." Because between day 364 and day 366 a tax bracket flips, an exit load drops off, and your post-tax cheque gains a third of a percentage point per hour you wait. The brochure does not put this on a card. The factsheet hides it on page four. Most people sell on the day their EMI pressure peaks, not the day their tax bill does.
11.50L
Day 364 . net cheque
Same Rs 10L in. Same Rs 12L paper gain. Sold one day inside the cliff. Exit load takes a bite. STCG bracket at 20 pct. Investor takes home Rs 1.50L of the Rs 2L gain.
VS
11.90L
Day 366 . net cheque
Same units. Sold 48 hours later. Exit load gone. LTCG bracket at 12.5 pct with Rs 1.25L exemption. Tax bill collapses from Rs 37600 to Rs 9375. Take home Rs 1.91L.
Rs 40225 on a Rs 10L investment. 4 percentage points of net return. Same fund. Same units. Same market. Two calendar days. Card two has the stack. Card three has the rules for staying on the right side of the cliff.