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LTCG Tax Formula:
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Long Term Capital Gains (LTCG) tax on mutual funds in India is applicable when units are held for more than 12 months and sold at a profit. The tax rate is 10% on gains exceeding ₹1 lakh without indexation benefit.
The calculator uses the LTCG tax formula:
Where:
Explanation: The calculation first determines capital gains (Withdrawal - Cost), then applies ₹1 lakh exemption, and finally calculates 10% tax on the remaining amount.
Details: Accurate LTCG tax calculation helps investors plan their mutual fund withdrawals efficiently, understand tax liabilities, and make informed investment decisions while complying with Indian tax laws.
Tips: Enter withdrawal amount and cost of acquisition in Indian Rupees. Ensure the mutual fund units were held for more than 12 months to qualify as LTCG. All values must be positive numbers.
Q1: What is the ₹1 lakh exemption in LTCG?
A: The first ₹1 lakh of long-term capital gains from equity-oriented mutual funds is exempt from tax in a financial year.
Q2: Is indexation available for mutual fund LTCG?
A: For equity-oriented mutual funds, indexation benefit is not available. For debt funds held for more than 36 months, indexation applies with 20% tax rate.
Q3: When is LTCG applicable on mutual funds?
A: LTCG tax applies when mutual fund units are sold after holding for more than 12 months and the gains exceed ₹1 lakh in a financial year.
Q4: How is STCG different from LTCG?
A: Short Term Capital Gains (STCG) applies to units held for less than 12 months and is taxed at 15% without any exemption limit.
Q5: Are there any deductions against LTCG?
A: You can set off capital losses against capital gains. Long-term capital losses can be set off only against long-term capital gains.