Trade Bizz: No LTCG tax if you sell shares or mutual fund units before 31 March 2018

Thursday, 8 February 2018

No LTCG tax if you sell shares or mutual fund units before 31 March 2018

The expected long-term capital gains (LTCG) tax on equity (including shares and equity mutual funds) in the Union Budget 2018 came as a blow for bankers. The Budget says that after 1 April 2018, the LTCG earned from investments in equity will be taxed at 10%. However, any LTCG earned till 31 January 2018 will be grandfathered, which would mean that LTCG earned before 31 January will not be taxed.

This move may prompt some investors to rejig their portfolios. There is some good news for them. On 4 February 2018, the Central Board of Direct Taxes (CBDT) released a list of frequently asked questions (FAQs) about the proposed tax on LTCG (read here: incometaxindia.gov.in/News/FAQ-on-LTCG.pdf). It says that the tax on LTCG would not be applicable on transfers (of equity investments) that are made between 1 February 2018 and 31 March 2018. Read more about the proposed rule and its tax implications.