Archive of articles on the yearly Union Budget of India
Budget 2018 has proposed that equity-oriented mutual funds be subject to a 10% dividend distribution tax (DDT) to ensure parity with the 10% LTCG tax on growth equity mutual funds. If you include the surcharge and cess, the rate of dividend tax is 11.648% and if you add the effect of “grossing up”, the full tax…
Continue reading →I am surprised at how many people assume that the 10% Equity LTCG tax introduced in Budget 2018 also applies to mutual funds. That is, they think that the Equity LTCG tax is a form of double taxation -the fund houses pay tax once and we tax again when we redeem. This is NOT true!…
Continue reading →Readers may recall that I have been covering equity LTCG tax in a series of posts. First, the implications, followed by simple examples on how to calculate LTCG tax after accounting for the grandfather rule. Then we discussed an illustration of how much Equity LTCG tax we need to pay. Now, in the second part of…
Continue reading →The day after Budget 2018 proposed LTCG tax on equity and equity oriented mutual funds, life insurers saw an opportunity to push ULIPS as the “go to” instrument now. Abandoning mutual funds in favour of ULIPS only to avoid the LTCG tax is like undergoing chemotherapy to shave a head (Robin Williams*). In this post, I…
Continue reading →It was announced in Budget 2018-2019: Long Term Capital Gains from Equity to be taxed at 10%. Here is an illustration of how much long-term capital gains tax you need to pay on a long-term systematic investment in equity or equity mutual funds. This is part one where the LTCG tax after each year of investment…
Continue reading →Here are eight lesser-known, but important budget 2018 proposals. I have now updated the three budget articles posted yesterday. Please do have a look: UPDATE: Equity LTCG Taxation: How much tax do I need to pay? Illustration part 1 Long-Term Capital Gains Taxation from Equity: Examples (Budget 2018-2019) Budget 2018-2019: Long-Term Capital Gains from Equity to…
Continue reading →As published it was announced in Budget 2018-2019: Long Term Capital Gains from Equity to be taxed at 10%. Here are some examples of how this works. Example 1: I purchase 10,000 units of an equity oriented fund (or stock, see definition of fund in the above post) at Rs. 10 NAV per unit on 4th Aug…
Continue reading →Budget 2018 has a slew of benefits for senior citizens. Here is a list. Also see: Budget 2018-2019: Long Term Capital Gains from Equity to be taxed at 10% – Implications New: Long Term Capital Gains Taxation from Equity: Examples (Budget 2018-2019) UPDATE: Equity LTCG Taxation: How much tax do I need to pay? Illustration part 1 1:…
Continue reading →Budget 2017 has proposed a slew of benefits related to long-term capital gains. The most important is the shift of the base year to be used for long-term capital gains computation for all asset classes. Here is a summary and illustration of long-term capital gains computation with base year 2001. 1: Change in duration for computation…
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