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Tax Query: LTCG Exemptions Under New Tax Regime – The Hindu BusinessLine
Under both tax regimes, Section 112A exempts LTCG up to тВ╣1.25 lakh on eligible equity-related assets held for over a year, with STT applied, and includes grandfathering for assets acquired before January 31, 2018.
I am aged 54, working in a PSU and fall under the 30 per cent tax bracket. I have opted for the new tax regime. I am a long-term investor with investments in shares and mutual funds. I have booked long term capital gains (LTCG) on shares and mutual funds in the current FY. Since I have opted for the new tax regime, kindly clarify.
Can I claim the exemption of тВ╣1.25 lakh for LTCG on shares and mutual fFunds?
Am I eligible to claim the benefits of grandfathering provisions?
S. Subramanyan
Exemption of тВ╣1.25 lakh for LTCG (under Section 112A) and grandfathering provisions are available under both old and new tax regimes.
Conditions to avail the benefit under Section 112A:
тАв Sale must be of equity shares or units of an equity-oriented mutual fund or units of a business trust.
тАв The securities should be long-term capital assets тАФ having more than one year of holding.
тАв The transactions of purchase and sale of equity shares are subject to STT (Securities Transaction Tax). In the case of equity-oriented mutual fund units or business trusts, the transaction of the sale is liable to STT.
If the conditions are satisfied, exemption of up to тВ╣1.25 lakh under Section 112A can be claimed.
Grandfathering provisions apply for eligible capital assets (listed equity shares, units of equity-oriented mutual funds and units of business trust) acquired on or before January 31 , 2018, and sold on or after February 1 , 2018. Assuming that your assets satisfy these conditions, grandfathering provisions are also available.
The writer is Partner, Deloitte India
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