We all know that effective from 1st April 2018, we have to pay tax on equity mutual funds if there is LTCG. However, the biggest task is how to calculate or identify the NAVs. To make your life simple, we can now download LTCG Tax Statement of Equity Mutual Funds.
Effective from 1 April 2018, equity mutual funds and direct equity investments will attract 10% long-term capital gains (LTCG) tax on gains exceeding Rs1 lakh a year.
Before proceeding further, let us first understand the taxation of Mutual Funds.
3 Factors that determine the Mutual Fund Taxation
First, let us understand what are the factors that determine the Mutual Fund Taxation. The three major part of these are below.
# Your Residential Status-Resident or Non-Resident (NRI)
Your tax will be based on your residential status. If you are resident then the taxation rules will be different and if NRI then it differs. Hence, first, you have to make sure of what is your residential status.
# Types of Funds-Equity Funds or Non-Equity Funds-
Any fund which invests 65% or more in equity is called as Equity Fund. For example, large-cap funds, multi-cap funds, small and mid-cap funds or equity-oriented balanced funds (where the equity exposure is 65% or more) are all called equity-oriented funds.
If the equity portion is less than that, then they are all treated as debt funds or non-equity funds. For example liquid funds, ultra-short term funds, short-term funds, income funds, gilt funds, debt-oriented balanced funds, gold funds, fund of funds or money market funds.
# Holding periods of Investment–
The holding period for Equity and Debt Funds will be different for taxation purpose. For equity funds, if the holding period more than a year, then it is called long term. If the holding period is less than a year, then such equity mutual funds holding period is considered as short term. Whereas in
Whereas in the case of debt funds, holding period more than 3 years is considered as long-term. If holding period of debt funds is less than 3 years, then it is considered as short-term and taxed accordingly.
I will try to explain the same from below chart.
Now you got the clarity on what will be STCG and LTCG. Let us move further and understand the Capital Gain Taxation for mutual fund investors.
Mutual Fund Taxation FY 2018-19 -Capital Gain Tax Rates
The biggest change from FY 2018-19 is the introduction of LTCG in Budget 2018. Below chart will give you the picture of that. Refer a detailed post on this subject at “Budget 2018 – Mutual Fund Taxation FY 2018-19“.
Note-Surcharge @ 15%, is applicable where the income of Individual/HUF unit holders exceeds Rs. 1 crore. Also, surcharge @10% to be levied in case of individual/ HUF unitholders where the income of such unitholders exceeds Rs.50 lakhs but does not exceed Rs.1 Cr. Further, Health and Education Cess @ 4% will continue to apply on the aggregate of tax and surcharge.
How will the LTCG Tax on Equity Mutual Funds be calculated?
After Budget 2018 announcement, as you are aware that you have to pay 10% LTCG Tax on Equity related products also. Below is the method to calculate the LTCG Tax on Equity Mutual Funds be calculated (Refer a detailed post at “Budget 2018 LTCG Tax on Stocks and Mutual funds“.)
How to download LTCG Tax Statement of Equity Mutual Funds?
Now this above Budget 2018 announcement made the date 31st January 2018 as the most important date for all equity and equity mutual fund investors. Because based on the value of as on 31st January 2018, you have to pay the LTCG Tax.
Hence, it is a cumbersome task for mutual fund investors to mark that date and identify the NAV and the gain as on 31st January 2018.
In order to avoid such difficulty, CAMS and Karvy came with the LTCG Tax Statement of Equity Mutual Funds. Using this feature you can easily download the values and calculate your tax.
As of now, CAMS and Karvy started this facility and in coming days remaining R&T Agents will also start providing this statement.
The list of CAMS serving Mutual Fund Companies is as below.
- 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
Hence, if you used CAMS online platform to link Aadhaar to Mutual Funds folios online, then it means that you automatically linked to all Mutual Funds which you are holding in these above listed mutual fund companies.
Along with CAMS, there are other Transfers Agents and they are as below.
- Karvy Computers (Provides services to rest of AMCs)
- Franklin Templeton International Services (Provides services only to Franklin Templeton Mutual Funds)
- Sundaram BNP Paribas Fund Services (Provides services only to Sundaram and BNP Paribas Mutual Funds)
In CAMS portal you will find two types of statement to download LTCG Tax Statement of Equity Mutual Funds. They are as below.
# Consolidated Grandfathered Statement of Equity Mutual Funds
In this statement, you will come to know the NAV, Unit Balance and Fair Market Value as on 31st January 2018. The statement looks like below.
# Capital Gain Statements of Equity Mutual Funds
The enhanced Capital gain/loss statement will allow investors to view the consolidated capital gains/losses across all mutual funds that are serviced by CAMS. Along with providing short-term and long-term capital gain /loss, the statement will also provide the original cost and the NAV as on 31st January 2018.
You can download the same under myCAMS—>Statements—>Realised Gains.
Both these statements are served as part of CAMS “mail back services” from CAMS website. Hence, you will receive both statements to your registered email id and it is completely free.
How to download LTCG Tax Statement of Equity Mutual Funds from Karvy?
Now Karvy also started an option to provide the LTCG Tax Statement of Equity Mutual Funds to unitholders where Karvy is R&T Agents.
You have to visit this link of KARY. You have to provide the registered Email Id and enter the new password. Then you have to select the time period of the statement. Then you can download the statement easily.
As I said above, as of now CAMS and Karvy started this facility. Once other R&T Agents start this, then I will update this post again.