NLE - The Bird System · Portfolio Tools

Fund Switch Break-Even

Your winner got too big and its returns are fading. Switching means paying capital-gains tax today. This shows how many years the new fund's edge takes to earn that back, what you'd gain, and whether staggering the exit saves tax.

1 · Your current holding

Enter one lumpsum, or add a row per tranche (e.g. an old SIP that stopped). Gain & tax auto-calculated on the total. All units assumed long-term (held > 1 yr).

Tranche (optional label)	Amount invested (₹)	Current value (₹)

Total invested: ₹0 Current value: ₹0 Capital gain: ₹0

2 · The switch

The edge is what this decision turns on. Current-fund return drives the rupee projections below.

Current fund return (%/yr, the fading rate)

Marginal return / edge (extra %/yr from new fund)

Holding horizon (years you'd stay)

New fund expected return = 12% (current + edge)

Tax settings (post-Jul 2024 equity LTCG)

LTCG exemption / year (₹)

LTCG tax rate (%)

3 · The verdict (switch all now)

Taxable gain

₹0

Tax to switch

₹0

Reinvested after tax

₹0

Tax drag on corpus

—

extra wealth if you switch & hold

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to earn back the tax at your 2% edge

4 · Goal seek

Solve for the numbers that decide it.

① Years to break even the tax

—

at your current 2% edge

② Extra gain if the switch runs for…

—

more than staying put

③ Edge needed to break even within…

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min. marginal return required

5 · Sensitivity to the edge

If your edge guess is off, here's how the break-even moves. Your entry is highlighted.

Marginal return (edge)	Break-even	Verdict vs your horizon

6 · Switch in tranches (harvest the ₹1.25L each year)

Spread the exit over several financial years to use the annual exemption repeatedly — but the un-sold slice keeps compounding in the fading fund. This weighs that trade-off.

Spread the exit over (financial years)

Compare wealth at year (uses your horizon)

Tax if staggered

₹0

Tax saved vs all-now

₹0

Fully tax-free exit takes

—

Best strategy at horizon

—

Strategy	Total tax paid	Wealth at year 10

See also → Capital Gains Tax Calculator · work out the exact LTCG/STCG on any redemption before you switch.

Assumptions & notes. Entire holding assumed long-term (>1 yr); short-term gains (20%) not modelled. ₹1.25L exemption is per financial year, per person, across all your equity LTCG — lower it if used elsewhere. New-fund return = current + edge; projections assume the new fund actually delivers that edge (this sizes the bet, it doesn't predict returns). Tranche mode sells an equal slice of the remaining holding each year (fully out by the chosen year), one sale per year, proceeds reinvested at the new rate while the rest compounds at the old rate. The tax you pay is largely owed eventually anyway at redemption, so break-evens are conservative. Not investment advice.