InvestorQ : Is the tax on long term equity gains really significant to your financial planning process?
Abhi Yadav made post

Is the tax on long term equity gains really significant to your financial planning process?

Answer
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Abhisha Yadav answered.
1 year ago


There are no two doubts about that. It is certainly a significant tax with major implications for post tax returns. When the Union Budget 2018 was presented by the Finance Minister, the big question was what would be the impact of the Capital Gains tax. The budget had announced a flat 10% tax on long term capital gains on equity investments and on equity mutual fund investments. This was a major shift because till March 2018, LTCG on equities and equity funds were entirely tax-free in the hands of the investor. This LTCG becomes specifically relevant because most investors do rely on equity funds to create wealth in the long term and to meet their long term goals like retirement, child education plan etc.

What is LTCG tax and what will be the impact of LTCG tax on your portfolio. More importantly, what will be the impact of LTCG tax on financial plan? Certainly, it reduces your post tax wealth and hence merits due consideration.