capital gain
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
02 January 2010
one persone invest Rs. 2000 per month in systemetic investment plan. after the end of 5 year he wants to redeem the all unit which is alloted to him. so now how to calculate capital gain on that? how much short term and long term?
02 January 2010
When you buy , the mutual fund allots you units and when you sell the mutual fund company call it redemption, which mean buyback from you on the NAV. So there may be gains or loss when you actually do the redemption. The capital Gains can be two types having two rates under I T Act. These are Long term Gains or Short Term Gains
Long Term Gains
If you held the units for more than a year, gains on such units redemption is tax free u/s 10(38) of the I T Act.
Short term gains
When the units are sold (redemption ) within one year of being held by the investor , it becomes short term gains or loss . The Short term gains are taxed @ 15 % u/s 111A of the I T Act.
The gains or loss is very easily computed as under
Redemption price paid by Mutual Fund Company xxxxxx
Less
Cost of acquisition of those units XXXXX
Long Term Gains
If you held the units for more than a year, gains on such units redemption is tax free u/s 10(38) of the I T Act.
Short term gains
When the units are sold (redemption ) within one year of being held by the investor , it becomes short term gains or loss . The Short term gains are taxed @ 15 % u/s 111A of the I T Act.
The gains or loss is very easily computed as under
Redemption price paid by Mutual Fund Company xxxxxx
Less
Cost of acquisition of those units XXXXX
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