# Wealthy Investors Use Lombard Lending to Defy Capital Gains Tax

> Wealthy investors borrow against shares to delay capital gains tax without selling.
- Title: Wealthy Investors Use Lombard Lending to Defy Capital Gains…
- Summary: Wealthy investors borrow against shares to delay capital gains tax without selling.
- Keywords: lombard lending, capital gains tax, borrowing against shares, investors, tax deferral, share loans, news, india, Wealthy, Use, Lombard, Lending
- Source: mint — https://livemint.com/money/how-wealthy-investors-use-lombard-lending-to-defer-capital-gains-tax-borrowing-against-shares-rather-than-selling-them-11793003929822.html
- Author: Sounak Mukhopadhyay
- Published: 2026-10-26T08:46:02+00:00
- Read time: 1 min
- Topics: lombard lending, capital gains tax, borrowing against shares, investors, tax deferral, share loans, news, india
## What is Lombard Lending?
Investors borrow against pledged shares to raise cash while retaining ownership and delaying capital gains tax.
## Loan Terms
Loans typically cover 30% to 60% of share value with interest rates of 9% to 12%.
## How It Works
Investors pledge shares to a bank or non-banking financial company to retain dividends and voting rights.
## Tax Implications
Borrowing does not trigger capital gains tax but requires repayment with interest.
## Example Calculation
Shares worth ₹1 crore with ₹60 lakh gains would cost ₹7.6 lakh in tax if sold, but borrowing ₹50 lakh at 10% interest costs less annually.
## Risks
Falling share prices can lead to margin calls, forced sales, and locked losses.
## Key takeaway

Wealthy investors borrow against shares to delay capital gains tax without selling.