The loss to the public exchequer through not taxing Long term capital gains was close to the tune of Rs.3,67,000 crores. To reduce the fiscal deficit, the Government has decided to bring the LTCG under the tax ambit and therefore Long term capital gain from listed equities will now be charged at the rate of 10% if the gains made are exceeding Rs.1,00,000.
Typically you would compute the gains as the difference between your sell price and the buy price. So if you’ve bought a stock at Rs.120 and sold it after 1 year at 230, your gains made on the trade would be Rs.120 (230 - 110). The Government however is extending the benefit of computing your purchase price as the highest price the stock made on the 31st of January 2018. This is what’s referred to as ‘grandfathered’. So if the stock you bought made a high of Rs.210 on 31st January 2018, you’ll not be required to pay taxes on the gains made from 120 - 210 (Rs.90), instead you’ll only be required to pay taxes on the gains made over and above the highest price of the stock - Rs. 20 in this case (230-210).
Also the LTCG will be applicable in all transactions where gains are made by sale of shares post 01st April 2018.