Answer

1. F

   Facts

   The most frequently triggered capital gains for salaried investors. Budget 2024 raised rate from 10% to 12.5% and raised the exemption from ₹1L to ₹1.25L. Both equity shares (held 12+ months on exchange) and equity mutual funds (65%+ equity, held 12+ months) qualify.

2. P

   Provisions and law

   • Sec 198 (old 112A)
   • Proviso Sec 198 (old 112A)
   • Sec 11 (old 10(38)) repealed
   • Sec 156 (old 87A) proviso
3. A

   Analysis

   What qualifies for 12.5% LTCG: Listed equity shares on NSE/BSE (held 12+ months, STT paid at sale). Equity mutual funds where equity allocation ≥ 65% of portfolio (held 12+ months). Units of business trusts (REITs, InvITs), specific rules. ETFs tracking equity indices, same as equity MF. ₹1.25L exemption, how it works: Annual. Not per transaction. If total LTCG from equity in a year = ₹2L, taxable gain = ₹2L − ₹1.25L = ₹75,000. Tax = ₹75,000 × 12.5% = ₹9,375. The ₹1.25L exemption resets every April 1. Grandfathering for pre-Feb 2018 holdings: Shares/MF bought before February 1, 2018: cost = higher of actual purchase price or market price on January 31, 2018. This protected gains that accrued before the tax was introduced. Gains from before Jan 31, 2018 = completely exempt.

4. C

   Conclusion

   1. 1Download capital gains statement from CAMS and KFintech for all MF folios
   2. 2Get equity P&L statement from broker (Zerodha Console / Groww / Kite)
   3. 3Sum all LTCG from equity shares + equity MF for the year
   4. 4Apply ₹1.25L exemption: if total LTCG ≤ ₹1.25L → zero tax, but still declare in Schedule CG
   5. 5For pre-Feb 2018 holdings: verify cost is set to Jan 31, 2018 market price in broker system
   6. 6Check: Sec 156, Income-tax Act 2025 (old Sec 87A) rebate CANNOT offset LTCG Sec 198 (old Sec 112A) tax, compute LTCG tax separately

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