Mutual Funds: Mutual funds are investment vehicles that invest funds in various instruments, including equity and debt. Real Estate: Real estate investments refer to investments made in residential or commercial real estate.
On average, mutual funds have generated returns of up to 12-14%, while real estate returns have been between 6-10%.
Mutual funds offer diversity by related to different industries, which results in the minimisation of risk. Meanwhile, real estate investment can be riskier, especially during weak economic conditions
Long-term capital gains (LTCG) tax is applicable on both investments depending on the gains made and the time horizon. The LTCG tax rate on mutual funds and real estate is 12.5%.
Investment in mutual funds can be done with as little as Rs 500. However, real estate investments require a significantly large amount of capital.
Mutual funds are highly liquid and can be redeemed with ease. Compared to that, real estate investments are illiquid and can often take a long time to sell.
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