Skip to main content

LTCG Tax - How much Tax you have to pay on your Mutual Fund Profits

Long-term capital gains (LTCG) tax has been proposed in the Budget on equity-oriented mutual funds, besides gains on equity.

Finance Minister Arun Jaitley has proposed that 10 percent tax will be levied on capital gains in excess of Rs 1 lakh in a financial year on selling one's investment in the specified instruments.

It has been specified that taxability would arise only if the transfer of such assets occurs after April 1, 2018.

Moreover, capital gains up to January 31, 2018 will be grandfathered, meaning any gains having accrued on an investment up to January 31, 2018, which is sold after 1 April 2018, would be exempt from tax.

The Income Tax Department has clarified that the gains will be computed without providing the benefits of indexation, which links your acquisition price to the cost inflation index.

So, how would the new tax structure impact your mutual fund investments? Well, firstly one has to be clear that it is limited to equity-oriented funds. The budget does not change the tax incidence on debt fundholding.

Investors have to be clear that LTCG tax is only on equity-oriented funds.  As far as debt funds are concerned, there is no change in the taxation structure compared to what is was prior to the Budget. For debt funds, short-term capital gains are taxed as per the individual's tax slab and the long-term capital gains are taxed at 20% if held for over 3 years and after adjusting for indexation

Any mutual fund scheme holding more than 65% of assets in equity is classified as equity-oriented scheme.

Here is a explaining the new tax regime on mutual funds:

ltcg

** For computing the Indexed Cost of Acquisition, the Cost Inflation Index (CII) of FY 2018-19 should be considered. Since the same has not been notified yet, purely for the purpose of the above computation, the CII of 2017-18 has been considered.

SIPs are Best Investments when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich - Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

Popular posts from this blog

Rs 14,000 Crore worth of tax free bonds coming soon from NHAI , PFC

  NHAI, PFC file prospectuses, coupon rate not yet decided MORE debt investment options have opened up for investors with AAA rated tax-free bonds worth over Rs 14,000 crore lined up. The National Highway Authority of India ( NHAI ) and Power Finance Corporation ( PFC ) are offering Rs 10,000 crore and Rs 4,033.13 crore worth of tax-free bonds, respectively, as per prospectuses filed with the Securities and Exchange Board of India (Sebi). Of a Rs 5,000 crore issue by PFC, Rs 966.87 crore has already been raised through private placement on September 28 and November 1. Tax-free bonds give investors tax-free return on any amount invested. In another kind of bonds, the long-term infrastructure bonds, investments up to Rs 20,000 are tax exempt, that is this cap amount can be deducted from the taxable income. Accordingly, the NHAI prospectus has clarified that only the amount of interest from -and not the actual investment on -its new bonds will be tax-free. "NHAI's publ...
Read more

Change in Fund Manager for some of HSBC Mutual Fund Schemes

Buy Gold Mutual Funds Invest Mutual Funds Online Download Mutual Fund Application Forms Call 0 94 8300 8300 (India) However, this facility is only available to Unit holders who have been assigned a folio number by the AMC.   HSBC Mutual Fund has announced that the below mentioned schemes shall be managed by the new fund managers as stated in the table. The effective date will be July 02, 2012.   Amaresh Mishra 's will be Vice President and Assistant Fund Manager. Having done a Post graduate diploma in Business Management and Bachelor of Chemical Engineering, he has over seven years of experience in Equities and Sales.   Mr. Piyush Harlalka's designation shall be Vice President- Fixed Income. Qualified as a C.A., C.S. and holding M.B.A.( Finance degree), he has over six years of experience in Fund management and ...
Read more

How EEE and EET Tax affect Retirement Investments

  An important factor while choosing a financial product is its taxation , and for retirement savings, this is even more important as the sums involved are usually life-long savings. Here's a look at the current tax treatment of three major long-term retirement planning products, which are - Employees' Provident Fund (EPF), Public Provident Fund (PPF) and National Pension System (NPS). EPF The tax treatment is EEE, which means your money is exempt from taxes at the time of investment, accumulation and withdrawal. At the time of investment, the tax deduction is under the limit of section 80C of the Income-tax Act , which is currently Rs 1.5 lakh. Partial withdrawals are also tax-free if made after 5 years of continuous service. If withdrawals are made before 5 years of service, 10% tax will be deducted at source. Exceptions have also been provided for transfer of amount and conditions wherein the subscriber is unemployed for more than 2 months or the loss of job was beyond th...
Read more

Personal Finance: You can insure your wedding

But luck may not always be on your side. With the frequency of such attacks, as also other risks and unforeseen accidents growing, a wedding insurance is something you may want to look at if a marriage is being planned in the family. Event insurance plans like this is still in its nascent stages due to low awareness. And given the sacred nature of the ritual, nobody wants to discuss or think negative. But as wedding spends and risks grow, it makes sense to cover the potential monetary loss. The policy in those countries even covers the loss of the wedding ring, the wedding gown not reaching on time and even the expenses/loss due to late or non-appearance of the photographer which may mean staging the event once again for the photograph. In India, most insurance companies — including ICICI Lombard General Insurance, Oriental Insurance, Bajaj Allianz and National Insurance — offer wedding insurance. The policy is tailor made to individual requirements and needs. The sum insur...
Read more

Special Fixed Deposits

Fixed Deposits Invest Online   One after the another, banks have been slashing interest rates on fixed deposits. In the last year alone, fixed deposit rates for the two-three-year tenure have fallen by 1-1.15 percentage points. But, some banks offer special fixed deposits at higher rates. Here's taking a look at some such deposits. What's on offer The Kuber 400 days deposit from the State Bank of Hyderabad offers 7.85 per cent per annum. This is 10 basis points higher than the 7.75 per cent offered by the bank on its 1-year to less than 2-year deposit. You have to invest a minimum of ₹10,000 in the deposit. There is no penalty for premature withdrawal as long as the deposit has remained with the bank for at least 7 days. Canara Bank has a 444-day and a 555-day deposit, both of which offer 7.85 per cent. This is higher than the 7.75 per cent rate on the bank's over one-year to less than five- year deposits for amounts less than ₹1 ...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now