No need to worry about the calculations anymore. Read on, we have a simpler solution!
If you’re a regular investor in Mutual Funds, you’ll know that according to the new rule issued, you’ll have to pay tax on equity Mutual Funds in case of LTCG. This new rule came into effect from 1st April 2018.
Due to this new rule, among other things, you need to know some basic information. These include knowing the NAV (Net Asset Value) of your fund as on 31st January 2018. NAV is the assets minus the liabilities of the fund divided by the number of shares outstanding. However, you needn’t calculate it. You can use the NAV that is declared by the fund house.
To further simplify things, you can now also simply download LTCG (Long-Term Capital Gains) statement of equity Mutual Funds to calculate taxes. As a part of the new rule, effective from 1st April 2018, you’ll have to pay 10% long-term capital gains (LTCG) tax on gains exceeding Rs. 1 lakh a year on equity mutual funds and direct equity investments.
Additional Reading: Market Crash! Should You Invest In Mutual Funds?
Is this too much to process? Don’t worry. Let’s break it down further by trying to understand how taxation of Mutual Funds works. There are three basic things that affect Mutual Fund taxation. They are:
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Holding Period
For taxation purpose, the holding period for equity funds and debt funds is calculated differently. In case of equity funds, if the holding period is more than a year, it’s considered to be long-term. But if it’s less than a year, it’s considered to be short-term. However, in case of debt funds, a holding period of more than 3 years is considered as long-term and anything less than 3 years is considered as short-term.
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Your Residential Status
Your residential status plays a crucial role in determining the way you’re taxed. The taxation rules are different for NRIs (Non-Resident Indians) and Indian citizens.
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Types Of Funds Involved
Depending on the type of funds involved—equity or non-equity, the taxes are calculated differently. As you already know, a Mutual Fund that invests primarily in stocks is called an equity fund. It needs to be 65% or more in equity. These can include small-cap, mid-cap, multi-cap, large-cap and equity-oriented balanced funds.
On the other hand, if the equity portion is less than 65%, it’s called a non-equity fund. Some examples of such funds are ultra-short term funds, gilt funds, gold funds etc.
To understand these new changes, here’s the Mutual Funds taxation guide for FY 2018-19:
Mutual Fund Taxation FY 2018-19 Capital Gain Tax Rates (For stocks and Equity-Oriented Mutual Funds)
| Type of Funds | Individuals | NRIs |
| Long-Term Capital Gain Tax | 10% above Rs. 1,00, 000 | 10% above Rs. 1,00, 000 |
| Short-Term Capital Gain Tax | 15% | 15% |
Mutual Fund Taxation FY 2018-19 Capital Gain Tax Rates (Other than stocks and Equity-Oriented Mutual Funds)
| Type of Funds | Individuals | NRIs |
| Long-Term Capital Gain Tax | 20% with indexation | Listed 20% with indexation and unlisted 10% without indexation |
| Short-Term Capital Gain Tax | Based on individual’s tax slab | Based on individual’s tax slab |
Now that you understand the new tax rules better, it’s time to know more about downloading LTCG tax statement of Mutual Funds.
Additional Reading: Follow These Rules For Successful Investing
You can make tax calculations simpler by using the LTCG Statement of Equity Mutual Funds. This will allow you to easily download values and make calculations. This has been introduced by CAMS, a Mutual Funds transfer agent. CAMS partners with the following Mutual Fund companies:
- HDFC Mutual Fund
- DSPBR Mutual Fund
- Birla Sunlife Mutual Fund
- HSBC Mutual Fund
- ICICI Prudential Mutual Fund
- IDFC Mutual Fund
- IIFL Mutual Fund
- Kotak Mutual Fund
- L&T Mutual Fund
- Mahindra Mutual Fund
- PPFAS Mutual Fund
- SBI Mutual Fund
- Shriram Mutual Fund
- Tata Mutual Fund
- Union Mutual Fund
In case you linked your Aadhaar to your Mutual Funds online using the CAMS platform, all your Mutual Funds from this list will be automatically linked. Apart from CAMS, there are a few other transfer agents available. These include Franklin Templeton International Services, Sundaram BNP Paribas Fund Services and Karvy Computers.
Once you log in to your CAMS portal, you’ll get two options—to download a consolidated grandfathered statement of all Mutual Funds and the Capital Gain statements of Equity Mutual Funds.
While the first one will show your NAV (Net Assets Value), Unit Balance and Fair Market Value as on 31st January 2018, the latter will let you see the consolidated capital gains/losses across all mutual funds that are serviced by CAMS.
Download path: myCAMS—>Statements—>Realised Gains.
That wasn’t that difficult, was it? Psst…you can save tax by investing in the right places. Start exploring now.