Managing the LTCG tax for your mutual funds

Equity markets have been in a tizzy ever since Union Budget 2018 imposed the 10.4% tax (including the cess and indexation) on long-term capital gain (LTCG) on equity mutual fund schemes and direct equities. While debt funds have been imposing a 20.6% LTCG tax (with indexation) after 3 years, equity funds were exempted, so far, from LTCG tax—if you had held your mutual fund units for at least 1 year. This exemption has been around since 2004. But LTCG tax is back for equity funds, though the holding period of 1 year—to distinguish long-term and short-term gains—remains the same, going forward. If you have been planning for your financial goals using mutual funds, it’s important to understand how LTCG will impact your portfolio Read More