LTCG Impact

My current investment in equity mutual fund is 10 lakh. What will be tax next year if my investment grows to 10.80 lakhs and i widhraw 80000 from fund ?

SC Mishra
Mumbai Chembur

Solution: 

Let's say you invest Rs 10 lakh in a mutual fund. A year later, the value of the investment has increased to Rs 10.80 lakh. Now, you want to withdraw the Rs 80,000 you have gained. In your holding, 7.4 per cent is the gain and the rest (92.6 per cent) is the original amount you invested. When you withdraw any money, the withdrawal shall be considered (for tax purposes) to consist of the gains and the principal in this same proportion. Therefore, of that Rs 80,000, only Rs 5,926 will be considered gains and will be added to your taxable income.