Long Term Capital Gains Tax India Mutual Funds

The taxpayer will however be liable to.
Long term capital gains tax india mutual funds. However after the introduction of finance bill. Long term capital gains calculation for equity mutual fund scenarios the short term capital gains are taxed at 15 6 including cess download. As amended by finance act 2020 tax on long term capital gains introduction gain arising on transfer of capital asset is charged to tax under the head capital gains. Taxation of long term capital gains on sale of mutual funds.
Tax planning guide for fy 2019 20non equity mutual funds. Jaitley also introduced the grandfathering clause which exempted gains made before january 31 2018 from tax. Long term capital gains accrued from selling equity shares and equity oriented mutual funds are exempt from tax for maximum up to rs 1 lakh in a financial year. Long term capital gain on mutual funds equity shares or equity oriented mutual funds that are held by an individual for more than 12 months is regarded as a long term capital asset.
While capital gains are taxable at the hands of investors the tax on mutual funds dividends called dividend distribution tax ddt is paid by the fund house asset management company on behalf of the investors. Income from capital gains is classified as short. Consider visiting your fund company s website beginning in october of each year to determine if and when there will be capital gains distributions. Long term capital gains obtained on the sale or transfer of equity mutual funds units are exempt from tax as per section 10 38.
The ltcg long term capital gains tax rate on equity funds is 10 on ltcg exceeding rs 1 lakh. I propose to tax long term capital gains exceeding rs 1 lakh at the rate of 10 per cent without allowing the benefit of. Mutual funds can provide earnings in two forms capital gains and dividends. You might want to focus on low turnover funds which include index funds tax efficient mutual funds and even some actively managed funds if you own mutual funds in a taxable account.
The gains in excess of rs 1 lakh are chargeable at the rate of flat 10 percent.