How is Ltcg calculated on ELSS?

So this investor investing an amount of Rs 1.5 lakhs in ELSS will now have to pay a tax on the gains above Rs 1 lakh. His total gain is Rs 1.5 lakhs, out of which, after removing Rs 1 lakh, we are left with Rs 50,000. 10\% tax of this is to be calculated. 10\% of Rs 50,000 is Rs 5000.

Are mutual fund capital gains taxed twice?

When you liquidate your holdings in a mutual fund, you’ll be taxed on any gain over the purchase price paid for each fund share held. This isn’t double taxation. (It’s smart to keep records of all fund share purchases, including those bought with reinvested dividends and capital gains.)

How much tax can I save with ELSS?

An equity-linked savings scheme or ELSS is a tax-saving investment under Section 80C of the Income Tax Act, 1961. By investing in ELSS, you can claim a tax rebate of up to Rs 1,50,000 a year and save up to Rs 46,800 a year in taxes. An ELSS is the only kind of mutual fund eligible for tax benefits under Section 80C.

Is Ltcg tax applicable on ELSS?

Introduction. Effective from 01 April 2018, the long-term capital gains exceeding Rs 1 lakh a year on equity-oriented funds is taxable at the rate of 10\%, with no indexation benefit. This means the ELSS investors should now account for LTCG tax before redeeming their investments.

How do mutual funds save Ltcg tax?

How to manage LTCG tax on Equity Funds

1. Ensure a complete understanding of the equity fund scheme before making an investment decision.
2. Avoid frequent buying and selling of units of the equity fund.
3. Select only those equity funds that have a track record of performance for an extended period (at least five years).

Is Ltcg on mutual fund exempt?

You make long-term capital gains on selling your equity fund units after a holding period of one year or more. These capital gains of up to Rs 1 lakh a year are tax-exempt. Any long-term capital gains exceeding this limit attracts LTCG tax at the rate of 10\%, and there is no benefit of indexation provided.

Are gains from mutual funds taxable?

Long term capital gains tax in equity funds is 10\% + 4\% cess provided the gain in a financial year is over Rs 1 Lakh. Long term capital gains upto Rs 1 Lakh is totally tax free. Short term capital gains (if the units are sold before three years) in debt mutual funds are taxed as per applicable tax rate of the investor.

How is LTCG applicable to ELSS funds?

LTCG shall be applicable to ELSS fund exactly like it is applicable to a equity fund. A person who sells shares after April 1, 2018 shall be required to pay a long-term capital gains tax at the rate of 10 percent on gains of more than ₹ 1 lakh.

What is the capital gains tax on ELSS funds?

Now after the introduction of 10\% Long Term Capital Gains (LTCG) tax on equity and equity oriented mutual funds, this ELSS fund will also become taxable since these ELSS funds are equity oriented. This fund is sold by the investor after a period of 3 years at Rs 3.0 lakhs, thus making a gain of Rs 1.5 lakhs.

Is ELSS still the best tax-saving option?

ELSS now has LTCG. Is it still the best tax-saving option? The Union Budget 2018-19 brought back the tax on Long-Term Capital Gains (LTCG) earned on equity holdings, much to the disappointment of those heavily invested in Equity Linked Saving Schemes (ELSS), stocks and equity funds.

What is the tax on ELSS gains above Rs 1 lakh?

So this investor investing an amount of Rs 1.5 lakhs in ELSS will now have to pay a tax on the gains above Rs 1 lakh. His total gain is Rs 1.5 lakhs, out of which, after removing Rs 1 lakh, we are left with Rs 50,000. 10\% tax of this is to be calculated. 10\% of Rs 50,000 is Rs 5000.