What is a Long-Term Capital Gain (LTCG)?
Capital gains are classified based on the holding period. Long-Term Capital Gains (LTCG) include:
|Security Type||Holding Period||Tax Rate|
|Equity and equity-oriented mutual funds||More than 1 year||* 10% of gains exceeding Rs. 1 lakh|
* Gains cannot be indexed
* Gains are calculated as per the grandfathering clause
|Debt mutual funds||NA||Treated as short-term capital gains and taxed as per your income tax slab|
|Listed bonds and debentured||More than 1 year||10% of the gain, without indexation|
|Unlisted bonds and debentures||More than 3 years||20% of the gain, without indexation|
For example, Ms Rani buys 100 Tata Motors shares at Rs. 500 per share (Rs. 50,000). She sells them after 2 years for Rs. 75,000. Her gain of Rs. 25,000 will be considered as an LTCG.
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