Frequently Asked Questions (FAQs) – Taxation of Long Term Capital Gains (LTCG)
- What is the meaning of long term capital gains?
Long term capital gains mean, gains arising from the transfer of long-term capital asset. The Finance Bill 2018 proposes to provide for a new long-term capital gains tax regime for the following assets:
- Equity Shares in a company listed on a recognised stock exchange;
- Unit of an equity-oriented mutual fund; and
- Unit of a business trust.
The proposed regime applies to the above assets, if the assets are held for a minimum period of twelve months from the date of acquisition.
- When will the tax be levied?
The tax will be levied only upon transfer of the long-term capital asset on or after 1st April 2018.
- What is the method for calculation of long-term capital gains?
The long-term capital gains will be computed by deducting the cost of acquisition from the full value of consideration on transfer of the long-term capital asset. (more…)