The Budget proposal of levying 10 per cent long-term capital gains (LTCG) tax on gains made above Rs. 1 lakh a year from equity mutual funds will act as a ‘dampener’ in the short term. The move will, however, not deter investments flowing into equity mutual funds in the long term, said Karthik Rangappa, Vice-President —Research & Educational Services, Zerodha.
Currently, investors paid zero LTCG tax on investments in equity mutual funds held by them for more than a year.
“The levy of LTCG will act as a dampener on investor sentiment in the short term. However, in the long term, investments will continue to flow into equity mutual funds,” Rangappa told BusinessLine on the sidelines of a press conference here on Thursday.
