What is LTCG Tax?

Background

Long-term capital gains (LTCG) tax applies to profits from selling assets held beyond specified holding periods. Rules differ for equity, debt funds, property and gold.

Explanation

Equity shares and equity mutual funds held for more than 12 months receive concessional LTCG treatment above a yearly exemption limit, while debt funds and other assets can have different holding periods and rates. Knowing these lets you time redemptions and SWPs more tax-efficiently.

Example

If you realise ₹2 lakh of long-term gains on an equity fund and only ₹1 lakh is exempt, the remaining ₹1 lakh is taxed at the applicable LTCG rate, influencing how much you actually receive from withdrawals.

Try the planner

See how this concept fits your own retirement plan.

Retirement Planner | All Retireopedia terms