LTCG Taxation: What needs to change in my portfolio?
The Long Term Capital Gains (LTCG) Tax is real. The 2018-19 Union Budget came as a blow to equity mutual fund investors and stock investors when the Finance Minister Arun Jaitley proposed to levy a tax of 10% on LTCG equity funds beyond Rs 1 Lac and on unlisted non-equity funds. It also levies a 20% (with Indexation) tax on listed non-equity mutual fund units. Before delving deeper into managing your equity portfolio and implementing tax-efficient strategies, it is imperative to learn the facts about this tax. 1. 10% tax without indexation benefit will be levied on the LTCG coming from the sale of equity mutual funds and equity, and those that have been held for over a year 2. 1 lac or less earned in LTCG in a year is tax exempt 3. Tax is applicable only on sale of equity that happens after March 31, 2018 4. LTCG that is accumulated till January 31, 2018 is exempt of this tax Investors in retail were active and getting comfortable with the equity market