The Budget 2018 changed how LTCG or Long Term Capital Gain on Stocks and Equity Mutual Funds will be taxed.  The Finance minister announced Long Term Capital Gain tax of 10%, without indexation,  for capital gains exceeding one lakh from all direct equity and equity mutual funds. However, all capital gains until  31 Jan 2018 will be grandfathered. Short-term capital gains tax remains at 15%. The new tax regime for LTCG is effective for transactions done from 1 Apr 2018. Article Budget 2018: Long Term Capital Gain on Stocks & Equity Mutual Funds with Calculator covers it in detail. This article lists the fair market value i.e highest Price of shares on BSE on 31 Jan 2018 which is required to calculate the cost of acquisition and Long Term Capital Gains.

Example of How Long Term Capital Gains on Equity will be calculated

How to Calculate Long Term Capital Gains on Equity for which STT has been paid is given in the image below and explained with an example

• An Indian equity mutual fund is acquired on 1st of January, 2017 at Rs. 100.
• its NAV is Rs. 200 on the 31st of January, 2018
• and it is sold on the 1st of April, 2019 at Rs. 250.
• As the actual cost of acquisition(100) is less than the fair market value(200) as on 31st of January, 2018, the fair market value of Rs. 200 will be taken as the cost of acquisition
• and the long-term capital gain will be Rs. 50 (Rs. 250 – Rs. 200).
• Tax on Long Term Capital Gain : 10% of Rs 50 = Rs 5
• If 1000 units were acquired then Total Capital Gain: 5000(5 X 1000) then no LTCG as Gain is less than 1 lakh
• If 25,000 units were acquired then Total Capital Gain: 125000(5 X 25000)
• The exemption is 1 lakh so Total Capital Gain is 25,000 (1,25,000 – 1,00,000)
• then LTCG is 10% of 25,000 which is 2,500 Rs.

Grandfathering of stock

BSE Stock Prices on 31 Jan 2018

One can find Share price of Stocks on BSE and NSE from the Bhav copy published on the sites on 31 Jan 2018.

Bhavcopy contains details of open price, high price, low, close and volume of every scrip traded on the exchange on that day. It can also contain details like turnover, trades, etc.