InvestorQ : Can you explain with a detailed illustration as to how the LTCG on equities will be treated under different circumstances?
indhumathi Sayani made post

Can you explain with a detailed illustration as to how the LTCG on equities will be treated under different circumstances?

Answer
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shrinidhi Rajan answered.
1 year ago


Particulars

LTCG but sold before 01st April 2018

LTCG but sold after 01st April 2018

LTCG but sold after 01st April 2018

Long Term Capital Gains

Rs.1,95,000

Rs.93,000

Rs.1,65,000

Basic Exemption for LTCG

N.A.

Rs.1,00,000

Rs.1,00,000

Taxable Capital Gain

N.A.

Nil

Rs.65,000

Tax at 11.648%

N.A.

N.A.

Rs.7,571

Net Capital Gains

Rs.1,95,000

Rs.93,000

Rs.1,57,429

As can be seen in the above case, the LTCG tax is only payable in excess of Rs.1 lakh overall provided the LTCG arises after 01st April 2018. March 31st 2018 was the last date before which such stocks could be sold without paying tax on long term capital gains. Of course, you need to remember one thing here. You do not get the benefit of indexation in this case and the 10% is a flat tax. That means when you plan your corpus for retirement or children’s education then the net profit that you earned above Rs.1 lakh will be fully taxed at a flat rate of 10%. You need to have a Plan-B for that.