Ch.8 · Dividend and STT Taxation · hard
How is LTCG on equity mutual funds calculated when units were purchased before January 31, 2018?
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EXPLANATION
LTCG on equity mutual funds was introduced from April 1, 2018. To protect gains accumulated before this date, a grandfathering provision was introduced: the cost of acquisition for units purchased before January 31, 2018 is the higher of (a) actual purchase cost or (b) NAV as on January 31, 2018. This ensures gains up to January 31, 2018 are not taxed under LTCG.
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