Long term capital Gain tax


#1

Hi,
My mother has made investments in 2 mutual funds in lump sum made a couple of years ago.

  1. SBI Magnum dividend - an initial investment of 1,00,000 INR and the current value is around 65,000 INR
  2. Tata large& mid growth - an initial investment of 1,00,000 INR and current value is around 1,30,000 INR

I am contemplating the tax implications on the redemption of these mutual funds.
I understand that 10% LTCG is applicable only in capital gains above 1 lacs for a year

Case 1- If she redeems both of these mutual funds in the current financial year(FY 2018-19), then Long term capital loss will be 5,000 INR
This amount can be carried forward for the next 8 assessment years.

Case 2- If she redeems only the Tata mutual fund in the current financial year(FY 2018-19), then long term capital gain will be 30,000
LTCG will be 30,000 INR but there will no tax as it is below 1 lac limit for the financial year.
(She has not sold any equity in the current financial year)

Then she can redeem the SBI Mutual fund in the next financial year(say in April 2019). If the redeemed value in April 2019 is 65,000 INR, then 35,000 INR will be long term capital loss for her and it can be carried forward for the next 8 assessment years.

Question 1-So for her, case 2 will be a better as she can offset the long term capital loss incurred in April 2019 in future(If LTCG is more than 1 lacs INR)

Question 2- Can long term capital loss/gains from different categories such as equity be used to offset long term capital loss/gain in another category such as real estate?


#2

Yes case 2 is most favorable with the set of example given . And for second question yes you can offset the LTCG loss against other long term gain.