Calculating capital gains with indexation

Download Tax Saving Mutual Fund Application Forms

Invest In Tax Saving Mutual Funds Online

Buy Gold Mutual Funds

Leave a missed Call on

94 8300 8300

 

 

Indexation allows to adjust the long term capital gains with inflation

Gold funds and liquid funds are taxed similarly. In your case, returns after a year will be taxed as long term capital gains which are subjected to either 10 per cent flat tax or 20 per cent after indexation.

 

Indexation allows to adjust the gains made on your investment, with inflation. The compounding effect of inflation can depress the real gains you make on an investment. Meaning, an investment made over last 15 years may have quadrupled now, but the purchasing power of money is down to less than half of what it used to be when you made the investment.

 

Following indexation, government does not tax you on the portion of gains that have been eaten away by inflation. Investors are given this benefit to compensate the loss of purchasing power in case of long-term capital gains. Indexation is calculated by applying an appropriate factor from the Cost Inflation Index to the original price of units.

 

Long term capital gains are calculated after applying indexation and then taxed at 20 per cent. If the tax so calculated exceeds the amount of 10 per cent flat tax (the one without indexation), the excess has to be ignored.

For further information contact Prajna Capitalon 94 8300 8300 by leaving a missed call

Leave a missed Call on 94 8300 8300

Leave your comment with mail ID and we will answer them

OR

You can write back to us at

PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

---------------------------------------------

Best Performing Mutual Funds

1. Largecap Funds Invest Online
1. DSP BlackRock Top 100 Fund
2. ICICI Prudential Focused Blue Chip Fund
3. Franklin India Bluechip
4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds Invest Online

1. ICICI Prudential Dynamic Plan
2. HDFC Top 200 Fund
3. UTI Dividend Yield Fund
4. Birla Sun Life Front Line Equity Fund
5. Franklin India Prima

C. Mid and SmallCap Funds Invest Online

1. Reliance Equity Opportunities Fund
2. DSP BlackRock Small & Midcap Fund
3. Sundaram Select Midcap
4. IDFC Premier Equity Fund
5. Birla Sun Life Dividend Yield Plus
6. SBI Emerging Businesses Fund
7. HDFC Mid-Cap Opportunities Fund
8. ICICI Prudential Discovery Fund

D. Small and MicroCap FundsInvest Online

1. DSP BlackRock MicroCap Fund

2.Franklin India Smaller Companies

E. Sector Funds Invest Online

1. Reliance Banking Fund
2. Reliance Banking Fund
3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

3. DSP BlackRock Tax Saver Fund
4. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds Invest Online

1. Relaince Gold Savings Fund
2. ICICI Prudential Regular Gold Savings Fund
3. HDFC Gold Fund
4. Birla Sun Life Gold

H. International funds Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF