Hey,
I have been curious about the buying and selling of mutual funds. To keep myself updated with the taxation policy on mutual funds, I read the news. LTCG or Long term capital gains tax is paid to the Income tax department upon earning capital gains from the investment. I will share with you ‘till what limit LTCG is tax free’ below.
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Till what LTCG is exempt?According to the Income-tax Act, LTCG is exempt up to Rs 1 lakh in a single financial year. Though the exemption can only be claimed if the individual has paid securities transaction tax when buying or selling the security.
Tax claimants will also need to make sure the security (equity shares and equity mutual funds) is sold only after being held for 365 days.
Till what limit LTCG is exempt?The limit of the exemption depends upon the holding period of your investment. Long-term gains and short-term gains have different exemptions.
I read in the news that for the financial year of 2022-2023, the surcharge on LTCG on listed equity shares, units, etc., has been capped at 15%. Long-term capital gains gained from profits earned on the sale of listed equity shares are free of taxation till the limit of Rs. one lakh. The limit of exemption is set at Rs.1 lakh.
Let me give you an example of LTCG and exemption. Let's assume I made a capital gain of Rs. 4,50,000.
Particulars |
Amount (Rs) |
Sale Consideration (A) (15,000 units @ Rs 30) |
4,50,000 |
Less: Cost of acquisition (B) |
1,50,000 |
|
Long-term capital gains (LTCG) (A-B) |
3,00,000 |
Period of Holding |
(More than one year) |
Tax Rate |
10% |
Keep an eye on this thread on ‘till what limit LTCG is tax free’ for more information.
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Authors Of The Question
Till what LTCG is exempt?
Darsh
180Views
2 Year
2022-10-31T23:17:38+00:00 2022-10-31T23:17:39+00:00Comment
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