Important Message on Long Term Capital Gain on Your Mutual Fund Investments... - MYREALITY.In, Real Estate, Share Market, Mutual Fund, Insurance
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Saturday, February 03, 2018

Important Message on Long Term Capital Gain on Your Mutual Fund Investments...

Important Message on Long Term Capital Gain on Your MF Investments...

by Mr. B. Padmanaban, CFPCM


Certified Financial Planner

www.fortuneplanners.com


Many have started worrying about what will be the impact on the LTCG in your existing portfolio, when it was introduced in the current budget 2018-19.
One of the reasons for investor coming to investing in equity, there has been tax only on short term capital gains and LTCG is zero till 31/1/18. Long term capital gains have been exempted from taxation since 2004. 

Henceforth, long term capital gains on shares and equity oriented mutual funds will be subjected to a tax of 10% after 1 lakh in the financial year.
To understand better, please look at the calculation of long term capital gains, the NAV would be taken as on 31’st January 2018.
Let us assume, if you invested in an equity fund in 2010 at NAV of Rs.10. Say about 1 Lakh. The NAV as on 31’st January 2018 is Rs.30. In 2021, when you redeem this fund, the NAV is at Rs.40. For calculating long term capital gains, your cost would NOT be taken as Rs.10 but only at Rs.30.
At the time of redemption in 2021 the value is 4 Lakhs. But, as on 31st Jan 2018 the value is 3 lakhs. So the overall gain is only 1 lakh, and assumes this is the only redemption in that financial year, you don't need to pay anything. In case, if your investment was 2 Lakhs initially then your long term capital gain is 2 lakhs of which first one lakh is exempted and the second 1 lakh you need to pay only 10% which is Rs. 10,000.
You can look at in two ways

1. Earlier tax regime I don't need to pay even this Rs. 10,000 so it is my loss. This is not in our hand tax rates are subject to Government action Risk.

2. Secondly, if you consider any other investment, the taxes are much more than this. You are paying capital gain, only when you are making more money. When we are in profit we will not mind paying anything extra.

On a lighter note:

Now Government will work for your investments to grow,
Why:

Now Government of India’s interests are perfectly aligned with you in your wealth creation efforts. Since 31-01-2018 prices are the base, Government can get LTCG only if markets rise from here on.

So just sit back and relax while you watch PM, FM and their entire team work for you.
There are few things only in our control, let us do what it is in our control. Something which is not in our control does not worry. We are resistant to any changes. This too shall pass!

Happy Investing for the Growing Economy like India to 
Create Wealth Creation...
B. Padmanaban, CFPCM
Certified Financial Planner
www.fortuneplanners.com
9884349173
padmanaban@fortuneplanners.com
Important Message on Long Term Capital Gain on Your Mutual Fund Investments... Reviewed by S. Chitra on February 03, 2018 Rating: 5 Important Message on Long Term Capital Gain on Your MF Investments... by Mr. B. Padmanaban, CFP CM Certified Financial Plann...

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