Hi, Since Market is at an All time high, I want to sell off all my Shares and Mutual funds which were made for the primary purpose of buying a home in near future. I have some investments in Shares, Some in ELSS Mutual funds, and some in Balanced and Equity Mutual funds, most of them already more than 2-3 years old. My Question is: If I sell off All my shares and Mutual funds what would be my Tax Implications? Is it all free from tax if held for more than a year? And I can do anything with that ,money and put it in a FD for now? Or I need to invest it in buying a property in order to save on Capital Gains Tax? I may not be able to buy a property immediately but might take 1-2 years. Thanks
Sir
If shares or mutual fund are held for more than one year then the Gain arising thereon are exempt from tax. However for ELSS you have to keep the investment for 3 years at least. Otherwise the 80C benefit you have taken will be reversed.
You can invest the amount in FD... There is no issue on that.
Hello sir,
Following will be tax implication based on type of investment and period of holding :
a) Shares :- Exempt if hold for more than 1 year
b) ELSS Mutual funds :- Taxable at full rate if withdraw before completion of 3 years
c) Balanced and Equity Mutual funds :- Exempt if hold for more than 1 year
I would advise you not to invest the same in FD rather to invest in Liquid Fund or Ultra short Fund which are 100% safe and yet give you 1 - 1.5% higher return than routine FD and later you can use the said fund to invest in property.
As per as new rules if the shares are 12 months old and STT paid then they are exempt. The same is case with mutual funds. If they are mutual funds invested in Equity then LTCG is 12 months period and in case they have invested in bonds then it is 2 years.
You can make FD, Since the capital gains is exempt there is no need to invest in the property.
Sir
If equity shares or equity mutual fund are held for more than one year then capital gains are exempt from tax.
However for ELSS you have to keep it for minimum 3 years. Otherwise the 80C benefit which you must have availed at the time of investing in ELSS, will be reversed.
You can invest the amount anywhere.
Please feel free to call/revert in case of any doubts
Thanks and Regards
Abhishek Dugar
CA CS B.Com
Hi,
The transactions mentioned are tax free subject to below conditions:
1) Sale of equity shares - Held more than 12 Months
2) ELSS Mutual Funds - After the lock-in period of 36 Months
3) Balanced and Equity Mutual Funds - Held more than 12 Months
Prima facie, you seem to satisfy all the conditions. So, you are free to do whatever you want from the proceeds. It is advisable to show the same in IT Returns as Exempt Income.
Hello Sir,
Capital Gain is exempt is STT is paid on sale of shares.
Mutual Fund will also be exempt if it is a Equity Fund but will be subject to Tax if it is debt.
ELSS is also exempt.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
