Budget 2018: LTCG tax on equities and equity mutual funds

Long-term capital gains (LTCG) tax is back. The finance minister declared in his budget conservation that the long-term capital gains tax—arising out of the sale of equity-adjust mutual fund schemes as well as from direct equity shares—will now be taxed at the rate of 10%, if your cumulative capital gains exceed Rs1 lakh in a year. If such gains are less than Rs1 lakh in a financial year, then you are exempt from paying this tax.

At the moment, LTCG tax arising out the sale of equity mutual funds and direct equity shares is nil, if you have held the units or shares for at least one year. Budget 2018’s tax proposals say that the threshold for long-term capital gains, though, will continue to be 1 year.

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