Equity LTCG Tax With Grandfathering Explained: Video + Calculator

Published: April 14, 2018 at 10:14 am

Last Updated on

Here is a simple way to understand how grandfathering works when calculating LTCG tax on equity instruments. Download a free equity LTCG tax calculator to estimate the tax to be paid before you withdraw from an equity mutual fund, You can also use it to calculate STCG, and it will work with debt mutual funds also. The calculator presented here is an update to the Mutual Fund Capital Gains Calculator. The main advantage of this calculator is that you can estimate LTCG or STCG tax to be paid before you make a withdrawal.

Let us now discuss Equity LTCG Tax with grandfathering with a video. The idea is to understand the concept of grandfathering without any math in a visual way so that we can sell at appropriate times to reduce tax. For example, if you wish to switch from regular funds to direct funds, now would be a perfect time to do so. Why? Because the current NAV of almost all equity funds (except arbitrage funds) would be lower than the NAV on Jan 31st 2018. So if you sell or switch, you will not have to pay LTCG tax.

Equity LTCG Tax With Grandfathering Explained: Video

Here are three examples discussed in the video. More examples can be found: Long Term Capital Gains Taxation from Equity: Examples (Budget 2018-2019) and Equity LTCG Taxation: How much tax do I need to pay? Illustration part 1

Equity LTCG Tax when NAV on sell-date is higher than NAV on Jan 31st, 2018

Equity-LTCG-tax-with-grandfathering-example-1Note that you will have to pay tax only if the sum of all such taxable LTCG (as shown above) across all your equity investments is above Rs. 1 Lakh in a particular financial year. If it is above Rs. one lakh, you will have to pat 10% tax with 4% cess on the amount exceeding one lakh. So for the next few years, the taxation amount will be pretty low for most of us. If you wish to see a detailed example see: Generating tax free income from arbitrage mutual funds

Equity LTCG Tax when NAV on sell-date is lower than NAV on Jan 31st, 2018


Please note that that effective LTCG in this case =0. There is no loss here.

Equity LTCG Tax when NAV on sell-date is lower than NAV on buy-date


This is an actual loss. The sell-NAV is lower than the purchase-NAV (or stock price). You can use this to reduce LTCG from other instruments (incl equity). If you do not have LTCG then you can report this LTCL and carry it forward for the next 8 financial years and offset it when possible.

Join our 1300+ Facebook Group on Portfolio Management! Losing sleep over the markt crash? Don't! You can now reduce fear, doubt and uncertainty while investing for your financial goals! Sign up for our lectures on goal-based portfolio management and join our exclusive Facebook Community

Additional resources on Equity LTCG taxation

Equity LTCG Taxation: How much tax do I need to pay? Illustration part 1

Should I book profits each year to lower Equity LTCG Tax?

Equity LTCG Tax With Grandfathering Calculator

Many people find it hard to believe but the above calculations have to be performed for each unit or stock sold. So if you have a SIP running, or multiple investments, then you will have to enter all transactions. There is no other way around! Please check the calculations presented and compare it the AMC CG statement. Consult a CA for clarification. If you notice any issues, let me know. Here are a couple of screenshots.




Download the Equity LTCG Tax With Grandfathering Calculator

Check out more videos from the freefinal youtube channel


Do share if you found this useful
Join our 1300+ Facebook Group on Portfolio Management! Do not lose sleep over your bleeding portfolio: Learn how to reduce fear, doubt and uncertainty while investing for financial goals! Sign up for our lectures on goal-based portfolio management and join our exclusive Facebook Community

Hate ads but would like to support the site? Subscribe to our ad-free newsletter and get beautifully formatted full articles delivered to your inbox!

About the Author

Pattabiraman editor freefincalM. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman has co-authored two print-books, You can be rich too with goal-based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management. He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice.
He conducts free money management sessions for corporates and associations on the basis of money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association. For speaking engagements write to pattu [at] freefincal [dot] com

About freefincal & its content policy

Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. We operate in a non-profit manner. All revenue is used only for expenses and for the future growth of the site. Follow us on Google News
Freefincal serves more than one million readers a year (2.5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication.Freefincal does not publish any kind of paid articles, promotions or PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)

Connect with us on social media

Our Publications

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingThis book is meant to help you ask the right questions, seek the right answers and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now. It is also available in Kindle format.

Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want

Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a young earner

Your Ultimate Guide to Travel


This is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when traveling, how traveling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for Rs 199 (instant download) 

Free Apps for your Android Phone

Comment Policy

Your thoughts are the driving force behind our work. We welcome criticism and differing opinions.Please do not include hyperlinks or email ids in the comment body. Such comments will be moderated and I reserve the right to delete the entire comment or remove the links before approving them.


  1. Can you please make a portfolio tracker where you can track the progress of individual stock like you made the stock analysis sheet which can be updated on real time basis
    It would be really helpful for all your of us

  2. Dear Professor /Pattu,
    Little confused as trying to match below statement with details mentioned by you. Confusion is about LTCG. IF i sold in Sep 2017, How come there will be LTCG? Or i misunderstood , Grandfathering?

    Sorry i am unable to copy/paste picture here. Failed to share the problem statement.

  3. Sir,

    I have downloaded this calculator, but i am facing problem.

    While clicking the Update NAV, upon clicking, the existing excel file is being closed and and fresh new blank excel sheet is getting open.

    I have office 2013 version.

    what should I do?

  4. Dear Mr M.Pattabiraman,

    Can you please send me a link to Download “Equity LTCG Calculator with Grandfathering”(Only For Stocks) as I could not get the said link in your article.
    I have already downloaded calculator from link for calculating LTCG on Mutual Funds.
    Thanks & Regards,
    Vijay Dighe

Leave a Reply

Your email address will not be published. Required fields are marked *