Is the 10% LTCG tax (Long Term Capital Gains) tax applicable to a tax saving ELSS fund? How will the tax be calculated?Asked
Yes, long term capital gain (LTCG) tax is applicable on Equity Linked Savings Scheme (ELSS). Following are the tax implications associated with ELSS:
A tax of 10% is applicable on gains of more than Rs.1 lakh, held for a period of more than one year.
However, if the investor sells his shares before 31st March, 2018, then long term gains on such shares will be exempt from tax.
Yes. LTCG shall be applicable to ELSS fund exactly like it is applicable to a equity fund.
Calculation of long-term capital gains on sale of ELSS fund/ equity fund shall be applicable as follows-
Purchase Price- ₹100
Highest price as on 31/01/2018- ₹125
Selling price- ₹140
Case 1: When shares sold before 31.1.18
Case 2: When shares purchased before 31.1.2018 and sold after 31.3.2018
Total LTCG- ₹40
Exempt LTCG- ₹25
Taxable LTCG- ₹15 @ 10%= 1.5