LTCG surcharge will be capped at 15%

In today’s budget, it was mentioned that the LTCG surcharge will be capped at 15%

What does this mean? I don’t think a surcharge is applicable for equity or mutual fund LTCG
Can someone please clarify it?

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Listed equity and MF are not the only capital assets, there are lot many other. Long term capital gains is generic term and applicable to gain arising from all assets.
While for listed equity there is concessional rate on LTCG, for other assets (like unlisted equity, property) etc., calculation of LTCG is different and tax rate is also different. There is a varying surcharge on it, based on level of gains.
Now FM has announced that surcharge will be capped at 15%.
So does not affect listed equity and MF, but for other assets, HNI and companies, booking large capital gain will see a reduction in tax

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Right, I am aware that capital gain tax is applicable on other asset also. My question is on equity and mutual fund LTCG. Currently, do we have to pay surcharge on it?

Yes there is following surcharge on equity and equity MF :

  • 10% where total income exceeds Rs. 50 lakhs but does not exceed Rs. 1 crore.
  • 15% where total income exceeds Rs. 1 crore but does not exceed Rs. 2 crores.

But there is no change in it due to today’s announcement.

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This 10% is on the entire LTCG or the amount that is eligible for tax? (after subtracting 1 lakh)

Surcharge is on the tax amount and not entire capital gains.

So lets say after all your calculations, your LTCG tax works out to Rs. 7 lakh (and assuming total income between 50lakh - 1 crore), Surcharge of 10% on 7 lakh tax, so total LTCG tax would be 7.7 lakh

So effective LTCG tax would be around 11% (and not 10+10 = 20%)

Got it, thanks. This 7 lakh is after subtracting the 1 lakh amount or without it?