Capital Gain tax Related query

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This discussion clarifies how long-term capital gains tax applies to mutual fund investments. The tax is calculated on profits made when units are redeemed. If you redeem units from multiple schemes in a single financial year, the profit exceeding £1 lakh will be taxed at 10% in that year. Conversely, redeeming units across different financial years allows you to benefit from the £1 lakh exemption in each of those years.

Aryan

Aryan (Querist)
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09 February 2023 Dear Expert,

I have a query regarding long term capital gain tax, I have invested in 3MF equity fund for long term. If i have profit of more than Rs 1 lakh in long term then how will tax be calculated on that because my question about that is, as per IT rules, if you have profit of more than Rs 1 lakh in a financial year If you get it, then you have to pay 10% capital tax, but I am not getting this capital gain in one financial year... because I have many more years invested.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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09 February 2023 Have you redeemed it or are still invested?
If redeemed, when?

Aryan

Aryan (Querist)
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10 February 2023 Not redeeming now, just inquiring about it just for information.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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10 February 2023 So, the capital gains will arise only in the year of redemption of these units. If you redeem all these in one single financial year, the tax liability of all these 3 MF schemes will arise in same (SINGLE) year even if bought in different financial years.
Vice versa, if you redeem in different FYs, you get benefit of 1 lakh exemption in each financial year!!

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