Equity LTCG Tax has not been increased from 10% to 15%!

Published: February 1, 2022 at 3:43 pm

Last Updated on February 1, 2022 at 7:09 pm

Budget 2022 has not increased Equity LTCG Tax from 10% to 15%! The mention of 15% was a reference to the capping of the surcharge on LTCG from other assets. An explanation.

How does surcharge work:  If your income is Rs. 100 and the tax is Rs. 30 and the surcharge applicable is 10%, then you need to pay a total tax of Rs. 30  + (10% of Rs. 30) = Rs. 30 + Rs. 3.

Currently, the surcharge on equity LTCG (shares and MFs) is:

  • 10% where total income exceeds Rs. 50 lakhs but does not exceed Rs. 1 crore.
  • 15% where total income exceeds Rs. 1 crore

In the case of LTCG from other assets (eg. immovable property), the existing surcharge is:

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  • 10% where total income exceeds Rs. 50 lakhs but does not exceed Rs. 1 crore
  • 15% where total income exceeds Rs. 1 crore but does not exceed Rs. 2 crores;
  • 25% where total income exceeds Rs. 2 crore but does not exceed Rs. 5 crores;
  • 37% on base tax where specified income exceeds Rs. 5 crores;

From 1st April 2022, the surcharge on all types of LTCG will be

  • 10% where total income exceeds Rs. 50 lakhs but does not exceed Rs. 1 crore.
  • 15% where total income exceeds Rs. 1 crore

There is no change in the Equity LTCG tax rules!!