Belying expectations, the finance minister Nirmala Sitharaman chose to retain long-term capital gains tax on equity mutual funds in her second budget. Most market participants were expecting a roll-back of LTCG tax and an extension of holding period to qualify for LTCG tax.
Returns on investments in equity mutual funds held over a year are treated as long-term capital gains and taxed at 10% on gains of over Rs 1 lakh in a financial year. The LTCG tax was re-introduced by Arun Jaitley, the then finance minister, in his budget speech on 2016.
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