Sensex and Nifty is at All Time High and thus it is actually necessary for us to book some profit at this time. I know the market can go up from now on or can go down too. But the best thing is to book some profit if you can.
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Now the question is should you book the profit and pay the tax. I am talking about paying tax because we have to pay Long Term Capital Gain Tax if the interest amount is more than 1 lac. So most of the people are in dilemma whether to book the profit and pay tax or should they not worry about the booking the profit at all.
Like for example, I have booked some profit when the market was at somewhat at peak thinking the market will go down. Now the thing is the market had climbed and I am thinking of booking the profit again. Now the thing is I have gains of around 48K. So if I rebalance more the amount can go above 1 lac and thus I have to pay LTCG.
So that's why a lot of people hesitant to even touch their portfolio thinking they have to pay the tax. But not booking the profit is again bad too. For example if the market goes down and if your portfolio need rebalancing, you can pump the money again.
So the best thing to do now is to book some profit, move the funds to debt and then once the market goes down, move the funds from the debt to equity. If your interets amount is getting more than 1 lac, then even it is fine because you have to pay some amount in the tax whereas of you don't book the profit now and if the market falls then a lot of returns which you should have got will not be there.
This is mainly in Indian Equity market, a lot of money is getting pumped into the market and we are not sure when is the high and thus doing profit booking slowly is actually good.
