Outlook Money
In Budget 2024-25, tax on long-term capital gains has been increased from 10 per cent to 12.5 per cent.
It was clarified that listed financial assets held for more than a year will be classified as long-term, while unlisted financial assets and all non-financial assets will have to be held for at least two years to be classified as long-term.
Irrespective of the holding period, unlisted bonds and debentures, debt mutual funds, and market-linked debentures will attract tax on capital gains at applicable rates.
For listed equity shares and equity-oriented mutual funds, tax rate and exemption rate have been increased from 10 per cent to 12.5 per cent, and from Rs 1 lakh to Rs 1.25 lakh, respectively.
The increase in LTCG tax can prompt some investors to reassess their investment strategies, particularly in assets that were previously more tax-efficient.
Compiled by Syed Muskan