The exemption of LTCG will continue till 31 March 2018. LTCG Tax of 10% will be applicable from 1 April 2018. A new section 112A is introduced into the Income-tax Act, 1961 to tax the long term capital gains on the listed shares and units of equity oriented mutual funds transferred on or after 1st April, 2018.

There is grandfathering provision for shares already held by an investor as on 31st January, 2018, which means cost of acquisition of shares will be price at 31 Jan 2018 or actual cost which is higher.

So if you have Long Term Capital Gains on Share as on today you need to compare with Price of Share as on 31 Jan 2018. In case price of Share as on today is less than 31 Jan 2018 price, no point in selling shares as the Price of 31 Jan 2018 will be considered cost and there will be No LTCG. Similar it is applicable for Equity Oriented Mutual Fund as well, you need to compare current NAV with NAV as on 31 Jan 2018

Following Example will help you

Calculations

Case 1

Case 2

Case 3

Purchase Price of Share  (a)

Rs 100

Rs 100

Rs 100

Price on 31 Jan 2018     (b)

Rs 200

Rs 200

Rs 200

Price Between 1 Feb 2018 to 31 March 2018

Rs 180

Rs 250

Rs 50

Total LTCG if sold

Rs 80

Rs 150

Rs (50)

Grandfathered LTCG

Rs 100

Rs 100

Rs 100

Taxable LTCG

Rs 0

Rs 50

Rs 0

Sell or Hold

Hold

Sell and Buy Again

Hold

Logic / Assumption

No Capital Gain as 31 Jan 18 Price is Higher than Purchase price

If price remains at 200 + after 1 April  2018 LTCG will be Applicable, If sold before 31 March LTCG Exempted

No Point in Booking Loss

From above examples it seems it is better to hold long term capital gains in shares if price is higher than price at 31 Jan 2018.

To check Price of BSE Shares on 31 Jan 2018

To check Price of NSE Shares on 31 Jan 2018

To check NAV of Mutual Funds on 31 Jan 2018

For any query you can write to chirag@cachauhan.in . Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not takeany responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on

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CA Chirag Chauhan

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Chartered Accountant, CA Chauhan



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    I hope by reading this article you got enlighten on ,Should you hold or Sell Equity Shares and Mutual Fund before 31 March 2018 to save LTCG? further to mention before taken any financial decision based on this content it is prefered to take an expert opinion as matter can be subjective.