Capital Gains Exemption on Sale of Mutual Funds

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  1. Aayush97

    Aayush97 New Member

    Is the capital gain exempt from tax payment in the following case?
    I have taken a loan for a new flat which is currently under construction. I want to repay a part of the loan by selling mutual funds. Can the capital gain on these mutual funds be exempted from tax payment? If yes, how? If no, why not?
     
  2. Karan Batra

    Karan Batra Well-Known Member

    If the Mutual Funds have been held for more than 1 year - No Tax would be levied

    If the Mutual Funds have been held for less than 1 year - 15% Tax would be applicable
     
  3. Prof Bajaj

    Prof Bajaj New Member

    If the mutual funds are equity-oriented (more than 65% equity), and have been held for more than 1 year, then no tax.

    If the mutual funds are equity-oriented (more than 65% equity), and have been held for less than 1 year, then 20% tax on capital gains.

    If the mutual funds are non-equity-oriented (less than 65% equity), and have been held for more than 3 years, then 20% tax on the capital gain calculated after indexation.

    If the mutual funds are non-equity-oriented (less than 65% equity), and have been held for less than 3 years, then tax as per slab.
     
  4. Karan Batra

    Karan Batra Well-Known Member

    Dear @Prof Bajaj

    Happy to see you back on the website after a long time.

    With respect to your answer, I think the criteria of 65% for Equity Mutual Funds is for claiming deduction under Section 80C.

    I dont think this criteria is applicable while claiming long term cpaital gains exemption on sale of Mutual Funds.

    Request you to kindly check and confirm
     
  5. Prof Bajaj

    Prof Bajaj New Member

    @Karan Batra : Thanks for your kind words. I will just say that the fund eligible u/s 80C is ELSS which is 100% equity and 3 years lockin. There are also Retirement Funds which qualify u/s 80C with 5 years lockin.

    Other than this please refer sec 10(23D) and Sec 10(38) according to which gains from a mutual fund having more than 65% equity exposure and held for more than 365 days is exempt from tax.

    Rather than prolonging the discussion here, I would request @Aayush97 to specify the name of the funds along with dates of sale and purchase so that we can address his queries specifically.
     
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