Smart Ways to Grow Money with Tax-Efficient Investments in FY 2025–26

As we step into the financial year 2025–26, savvy investors are looking at more than just returns—they want growth that is aligned with tax efficiency. While traditional tax-saving products like insurance or government bonds have their place, they often don’t align with the sophisticated portfolios of high-net-worth individuals (HNIs), NRIs, or global investors.

At Gravitas Investments, one of the best investment company in Pune, our focus is on helping clients navigate equity, debt, and alternative investments in ways that maximise after-tax returns. While taxation is a specialist’s domain and should always be confirmed with a chartered accountant, understanding how different investment vehicles are treated under Indian tax law can make a significant difference in your wealth strategy.

Equity Mutual Funds – Growth with Favourable Taxation

Equity remains the cornerstone of wealth creation. Under current tax rules:

• Long-Term Capital Gains (LTCG): Gains on listed equity and equity-oriented mutual funds held for more than one year are taxed at 10% (above ₹1 lakh exemption).
• Short-Term Capital Gains (STCG): Gains on holdings less than a year are taxed at 15%.

For investors who aim for compounding over 3–5 years or more, the favourable LTCG treatment makes equity mutual funds highly tax-efficient compared to many traditional instruments. Gravitas Investments works with clients to structure mutual fund portfolios across large-cap, mid-cap, and thematic funds that balance growth potential with tax efficiency.

Debt Mutual Funds – Stability with New Tax Rules

The 2023 changes in debt mutual fund taxation eliminated indexation benefits, meaning:

• All capital gains (short or long term) from debt funds are now taxed at slab rates if less than 35% equity allocation.

While this has reduced the earlier advantage, debt funds remain useful for:

• Diversification and liquidity,
• Tactical allocation for cash management,
• Matching goals with lower risk tolerance.

For investors in higher tax brackets, we help explore alternative fixed-income products like AIF debt structures or Gift City-based instruments that may provide more efficient outcomes.

Portfolio Management Services (PMS) – Tailored Portfolios, Direct Taxation

PMS gives investors direct ownership of securities, unlike pooled funds. This means taxation depends on the type of underlying transactions:

• Listed equity trades: Same as equity mutual funds (10% LTCG, 15% STCG).
• Debt instruments: Taxed as per the slab.

Because PMS strategies are customised—whether concentrated equity, multi-cap, or thematic—investors can align portfolios with tax-aware strategies like booking gains efficiently, managing dividend distributions, or focusing on long-term compounding. We work with PMS providers to ensure investors benefit from both expertise and smarter tax positioning.

Alternative Investment Funds (AIFs) – Sophisticated Structures for Sophisticated Investors

AIFs have become a popular vehicle for HNIs and ultra-HNIs. Taxation differs by category:

• Category I & II AIFs (PE/VC/Private Credit): Income (except business income) is taxed at the investor’s end, with pass-through status.
• Category III AIFs (Hedge Funds/Trading Strategies): Taxed at fund level; investors receive post-tax returns.

AIFs offer exposure to private markets, structured credit, and hedge strategies—areas that not only diversify risk but can also create tax efficiency depending on structure and investor residency. The best investment company in Pune assist clients in evaluating AIF opportunities that complement their broader wealth plans.

REITs & InvITs – Income and Tax Efficiency in Infrastructure & Real Estate

Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) offer an innovative way to earn dividend income and potential capital appreciation without the hassles of direct property ownership.

• Dividend Income: Generally taxable in the hands of investors, except in specific cases.
• Capital Gains: Listed units follow equity taxation (10% LTCG after 1 year, 15% STCG before 1 year).

For clients seeking steady cash flows plus growth potential, we include REITs and InvITs as part of diversified, tax-efficient portfolios.

Gift City Advantage – A Gateway for Residents and NRIs

India’s International Financial Services Centre (IFSC) at GIFT City has opened new opportunities for tax-efficient investing.

• For Residents: Investments in Gift City funds and structures can offer better post-tax outcomes, thanks to exemptions and global access.
• For NRIs/OCIs: GIFT City allows smoother participation in Indian markets with benefits like no capital gains tax on certain instruments, exemptions on derivatives, and ease of repatriation.

We help clients—both residents and NRIs—leverage Gift City platforms to structure investments with a global outlook while remaining tax aware.

Residents vs. NRIs – Different Tax Considerations

Tax treatment differs significantly for Indian residents vs. NRIs/OCIs:

• Residents face slab-based taxation on non-equity instruments but enjoy exemptions in equity LTCG.
• NRIs often face TDS on mutual fund redemptions and dividends, though DTAA (Double Taxation Avoidance Agreements) can reduce the net impact.

We don’t replace a tax advisor, but we ensure investment choices—whether MFs, PMS, AIFs, or Gift City opportunities—are made with an understanding of these cross-border tax nuances.

Final Thoughts

Taxation shouldn’t drive every investment decision, but it absolutely shapes after-tax wealth outcomes. By understanding how equity, debt, PMS, AIFs, REITs, and Gift City structures are taxed, investors can build smarter, more resilient portfolios.At Gravitas Investments, we focus on helping clients align wealth growth with tax efficiency, while leaving detailed compliance to their CAs. The result? Investments that not only grow but also work harder after tax. If you’re an HNI, NRI, or forward-looking investor seeking to navigate FY 2025–26 with confidence, our best investment company in Pune can guide you toward tax-aware strategies in equity, debt, and alternative markets—ensuring your wealth grows efficiently, year after year.