Income Tax department issued a draft notification in which it specified transactions that would benefit from the grandfathering clause of the long-term capital gains (LTCG) tax provision.

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Grandfathering benefits of LTCG would be applicable even where securities transaction tax (STT) is not paid.

Therefore, the department, through the draft, is acknowledging that STT may have not been paid in many genuine cases.

Also read: Get used to LTCG tax on your equity investments

In Union Budget 2018, a grandfathering clause was proposed with the LTCG tax provision, according to which an investor who acquired shares or equity funds before February 1 will be exempt from LTCG tax for all future years.

Finance minister Arun Jaitley, in the February budget, announced levying of 10% tax on stocks and equity-oriented mutual funds if the gains exceeded Rs 1 lakh.

First Published:Apr 25, 2018 7:15 AM IST