What do you mean by grandfathering?

A grandfather clause (or grandfather policy or grandfathering) is a provision in which an old rule continues to apply to some existing situations while a new rule will apply to all future cases. Those exempt from the new rule are said to have grandfather rights or acquired rights, or to have been grandfathered in.

How is grandfathering calculated?

The grandfathering is allowed by comparing different values such as cost, sale price, and market price for each share/unit (as on January 31st, 2018). In this process, there is a need to capture the scrip-wise details for computing capital gains of these shares/units.

What is grandfather value?

Any gains prior to January 31 are grandfathered. This means the capital gains will be zero if the sale price of equity/ mutual funds is more than the cost of acquisition but less than the value on January 31. In this case, the actual cost of acquisition is less than the fair market value as on 31st January, 2018.

What is Ltcg exemption?

Residential Indians between 60 to 80 years of age will be exempted from long-term capital gains tax in 2021 if they earn Rs. 3,00,000 per annum. For individuals of 60 years or younger, the exempted limit is Rs. 2,50,000 every year.

Who is called grandfather?

Your grandfather is the father of your father or mother. You can call your grandfather ‘Grandfather’. His grandfather was a professor. Synonyms: grandad, grandpa, grandaddy, gramps More Synonyms of grandfather.

Is grandfathering applicable to equity shares?

By Finance Act, 2018 the grandfather clause has been introduced in respect of investment made on or before 31 January 2018 in equity shares or units of an equity-oriented mutual fund.

Can grandfathering loss be carried forward?

Grandfathering provisions that apply to shares acquired before January 31, 2018, do not affect a taxpayer’s entitlement to set-off/ carry forward long-term capital losses. Therefore, losses from transfers effected before the cut-off date would be treated as dead loss and shall not be allowed to be set-off.

What is grandfathered investment?

In the budget, there has been a proposal to grandfather investments made on or before 31 January 2018. What is the concept of Grandfathering? When a new clause or policy is added to a law, certain persons may be relieved from complying with the new clause. This is called “grandfathering”.

Is grandfathering applicable to mutual funds?

With effect from April 1, 2018, long term capital gains in excess of Rs 1 lakh on sale of equity shares, units of equity-oriented mutual funds were made taxable at 10\%. However, in order to protect the investor interests, gains up to January 31, 2018 were grandfathered.