In the recent Union Budget, the one significant change that has impacted a large number of taxpayers is the one relating to reintroduction of long-term capital gains (LTCG) tax on sale of listed equity shares and units of equity-oriented mutual funds from April 2018 onwards. The impact of the 10% tax on the gains, computed without cost indexation, has been softened by providing for taking the cost at the fair market value as of 31 January 2018, thus ensuring that gains up to that date continue to enjoy the benefit of exemption. While there clearly seem to be two views as to whether the removal of such exemption was desirable or not, and much discussion has centred around this, not much has been discussed about how the new provisions would really work.
Unfortunately, the manner of drafting of the amendments leaves much to be desired. The amendments have been introduced in the section dealing
