Suppose I buy a equity Mutual fund with growth option after 1st April 2018 and after 10 years my total gains is 500000 . Do i have to pay 10 % of it which is 50000 as LTCG if i decide to redeem ? or this LTCG in form of DDT is only on Dividend based equality mutual fund ?
1lakh per annum is exempted. No tax on gains up to 1 lakh per annum. If gain is more than 1 lakh then gain - 1lakh will be taxed with 10% plus 4 % cess. Total 10.4% on balance gain after deducting 1 lakh
So you mean for 10 year i get at least 10 lakh on which i dont pay LTCG tax?
but you have to sell every year…it is not that after 10year you will cut 10Lakh from profit.
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You will have to go in a mode of tax harvesting every year. So, every year you redeem mutual fund with LTCG worth Rs. 1Lakh (the total redemption amount does not matter) and reinvest again.
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@awanish_kumar Well, we can’t say much for next 10 yrs. Policies are always subject to change, review, and amendments.
Considering no change in policy in upcoming next 10 yrs, then you have to pay 10% of your capital gain if it is more than 1 lakh.
So it’s better to redeem some part of investment which is less than 1 lakh and has completed one year and reinvest it.
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