Showing posts with the label long term capital gains

Mutual Funds Taxation - Simply Explained

Mutual Funds Taxation - Simply Explained Generally, there is no TDS (Tax Deducted at Source) applicable for the Mutual Funds and Shares in India. One should declare these type of income as 'Other source of income' while filing the Income Tax returns. For the Mutual Fund schemes, the Taxation is divided into two categories - Debt Funds and Equity / Hybrid Funds. Hybrid Funds (Earlier Balanced Fund) is a combination of both debt and equity based funds. In case of Investing in Debt oriented funds, the holding period of a funds will tells the taxation rate. As you can see in the below table, If an investor redeem his money from the debt fund with in three years from the time of investment, then he or she will be taxed as per the Income Tax Slab. If the holding period is more than 3 years and the redemption is happening, then the Tax rate would be 20 percent with Indexation Benefit. For instance, Rs. 1 Lakh will be invested in a Debt Fund Scheme of a particular AMC (Asset Management

Frequently Asked Questions (FAQs) regarding taxation of long-term capital gains

  Frequently Asked Questions (FAQs) regarding taxation of long-term capital gains(LTCG) proposed in Finance Bill, 2018-reg,   ( This article is the press release of Income Tax Department - FAQ regarding taxation of long term capital gains - Budget India 2018 dated 4th Feb, 2018 ) Under the existing regime, long term capital gains arising from transfer of long term capital assets, being equity shares of a company or a unit of equity oriented fund or a unit of business trust, is exempt from income-tax under clause (38) of section 10 of the Act. However, transactions in such long-term capital assets are liable to securities transaction tax (STT). Consequently, this regime is inherently biased against manufacturing and has encouraged diversion of investment to financial assets. It has also led to significant erosion in the tax base resulting in revenue loss. The problem has been further compounded by abusive use of tax arbitrage opportunities created by these exemptions. 2. In order to mi