LTCG on equity

By Morningstar |  20-06-18 | 

Need some clarification for calculation of my tax liability. I had invested Rs 1,00,000 in two mutual funds and earned a profit of Rs 32,805.88 for the FY 2017-18 (held for 3 years). I would now like to know how to compute the amount of tax I am required to pay thereon.

- Caroline

In the Union Budget for 2018-19, it was announced that Long Term Capital Gains, or LTCG, in excess of ₹1 lakh, from listed equity shares, equity-oriented funds and unit of a business trust to be taxed at the rate of 10%, without the benefit of indexation.

However, gains up to January 31, 2018 will be grandfathered i.e. for the calculation of LTCG, the reference price will be either, the price as of 31 January, 2018 or the actual cost of acquisition, whichever is higher.

Assuming that your investments are in equity-oriented funds and you have realized capital gain in FY2017-18, LTCG tax won’t be applicable on these two mutual funds (redeemed in FY2017-18) as the LTCG tax rate is applicable for the FY2018-19.

Having said that, we suggest that you consult an investment/tax adviser regarding all your investment decision.

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