Tax on Long Term Equity returns, in case of DTC

POSTED BY Popeye ON December 4, 2012 11:29 am ONE COMMENT

Hi Manish and all,

I have some tax saving MF holdings. Few of them have completed the locking period of 3 years. But, if I look at their performance lately, they are doing well e.g. SBI Magnum Tax-gain, Sundaram Tax Saver, HDFC Tax saver etc.

I am no more investing in tax saving MFs now, as I have home loan to cover my 80C.

Questions I have

  1.  If, I do not redeem these holdings and continue in next FY:2013-2014, what will be the impact of Direct Tax Code. I have heard that the returns will be taxable? If this probability is true, then any idea/projections how the tax will be calculated?
  2. If so, will it be beneficial that I switch this funds to some other MFs other than ELSS, before 31st-Mar-2013, so that I can save the tax on the gains?
  3.  Also, any equity holdings more than one year (Stocks, MFs), today are considered as Long Term gain and returns are not taxable. But this is gone change if Direct Tax Code comes in picture? So, to avoid tax on the gains till date for the investments which already have completed 1 year, is it advisable that one should redeem it, and if at all one wants to be invested in the same stock or MF, he should just sell and re-buy the same with same amount, just to start with a fresh buying? This will save tax on the gains till date.

Your advice is appreciated.

One reply on this article “Tax on Long Term Equity returns, in case of DTC”

  1. TheZionView says:

    As far as i remember DTC doesnt change long term captial gain tax. which mean any MF/stock sold after one year is tax free if the STT are paid.

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