While debt funds have been imposing a 20.6% LTCG tax (with indexation) after 3 years, equity funds were exempted, so far, from LTCG tax—if you had held your mutual fund units for at least 1 year. But LTCG tax is back for equity funds, though the holding period of 1 year—to distinguish long-term and short-term gains—remains the same, going forward. If you have been planning for your financial goals using mutual funds, it’s important to understand how LTCG will impact your portfolio. Keep your expectations in checkAn LTCG tax of 10.4% will not dent your funds’ returns by too much. If you haven’t rebalanced your portfolio so far, then the LTCG tax is a good reason to do it now.

Source: Mint February 11, 2018 18:00 UTC