I am aged 54, working in a PSU and fall under the 30 per cent tax bracket. I have opted for the new tax regime. I am a long-term investor with investments in shares and mutual funds. I have booked long term capital gains (LTCG) on shares and mutual funds in the current FY. Since I have opted for the new tax regime, kindly clarify.

Can I claim the exemption of ₹1.25 lakh for LTCG on shares and mutual fFunds?

Am I eligible to claim the benefits of grandfathering provisions?

S. Subramanyan

Exemption of ₹1.25 lakh for LTCG (under Section 112A) and grandfathering provisions are available under both old and new tax regimes.

Conditions to avail the benefit under Section 112A:

• Sale must be of equity shares or units of an equity-oriented mutual fund or units of a business trust.

• The securities should be long-term capital assets — having more than one year of holding.

• The transactions of purchase and sale of equity shares are subject to STT (Securities Transaction Tax). In the case of equity-oriented mutual fund units or business trusts, the transaction of the sale is liable to STT.

If the conditions are satisfied, exemption of up to ₹1.25 lakh under Section 112A can be claimed.

Grandfathering provisions apply for eligible capital assets (listed equity shares, units of equity-oriented mutual funds and units of business trust) acquired on or before January 31 , 2018, and sold on or after February 1 , 2018. Assuming that your assets satisfy these conditions, grandfathering provisions are also available.

The writer is Partner, Deloitte India  

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Published on December 30, 2024