Categories: Mutual Funds

Long Term Capital Gain

Profits realised by selling listed investments and other assets like real estate, land, buildings, ornaments etc are known as Capital gains. Long Term Capital Gains are realised on selling these assets and the gains are defined as per the ‘holding period’ for which the investments or assets are held by the investor.

What is LTCG for Mutual Funds?

The LTCG is different for different types of funds and is defined as per the holding period.

LTCG on Equity Mutual Funds – For Equity funds, a holding period of more than 12 months is defined as Long Term and the profits earned beyond INR 1 Lakh (from all equity investments) are taxed at the rate of 10 percent.

LTCG on Debt Mutual Funds – For Debt Funds, a period of 36 months and more is known as ‘Long Term’. The Long Term Capital Gains realised on redeeming Debt fund units after three years will be taxed at the rate of 20 percent with indexation.

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