I am retired and have some investments in mutual fund. If I redeem funds for Rs 3 lacs, how much tax i have to pay and what is the basis of calculation. Thanks

Ans: You have not given out what PF are you referring to.
However, in general, any maturity amount of PPF and any Govt PF is tax free.
As far as EPFO is concerned, any withdrawal after five years of continuous service is tax-free.

Ans: Hello, the LTCG will be 8.75L -5L-1L = 2.75L * 10% = Rs.27500 + cess as applicable
The above statement is valid for someone who has income above the basic tax limit

Ans: Tax Implications of Redeeming Mutual Fund Investment
Congratulations on the growth of your investment! Let's delve into the tax implications of redeeming your investment in Mirae Asset Healthcare mutual fund.

Understanding Capital Gains
When you redeem your mutual fund units, any profit you earn is considered capital gains and is subject to taxation. Capital gains are classified as either short-term or long-term based on the holding period.

Short-term Capital Gains
If you redeem your mutual fund units within three years of purchase, the resulting gains are considered short-term capital gains. These gains are added to your taxable income and taxed according to your applicable income tax slab rate.

Long-term Capital Gains
If you hold your mutual fund units for more than three years before redeeming, the gains are classified as long-term capital gains. Long-term capital gains on equity-oriented mutual funds are taxed at a flat rate of 10% without indexation benefits, provided the gains exceed ?1 lakh in a financial year.

Tax Calculation
In your case, since the investment was made in November 2018 and the present value is ?3.3 lakhs, the investment has been held for more than three years. Therefore, the gains would be classified as long-term capital gains.

The tax would be calculated as 10% of the gains exceeding ?1 lakh. Let's say your total gain is ?2.3 lakhs (?3.3 lakhs - ?1 lakh), then the taxable amount would be ?1.3 lakhs (?2.3 lakhs - ?1 lakh). So, the tax payable would be ?13,000 (10% of ?1.3 lakhs).

Mitigating Tax Liability
There are certain strategies to mitigate your tax liability:

Tax-saving Investments: Consider investing in tax-saving instruments like Equity Linked Savings Schemes (ELSS) or Public Provident Fund (PPF) to avail of deductions under Section 80C.

Tax Loss Harvesting: If you have other investments with capital losses, consider selling them to offset the capital gains from your mutual fund investment.

Conclusion
Redeeming your mutual fund investment entails tax implications based on the holding period and gains accrued. Understanding these implications can help you plan your finances effectively.

If you need further assistance in tax planning or investment strategies, feel free to reach out. I'm here to help you navigate through your financial journey.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Based on the information you've provided, it's likely you won't have any LTCG tax liability for FY 2023-24. Here's why:

Sale proceeds: Rs. 2.76 lakhs
Reinvestment in ELSS: Rs. 1.00 lakh
ELSS (Equity Linked Savings Scheme) investment qualifies for deduction under Section 80C of the Income Tax Act. Up to Rs. 1.5 lakh invested in ELSS can be deducted from your taxable income.

Taxable LTCG (if any): Sale proceeds (Rs. 2.76 lakh) - Reinvestment (Rs. 1.00 lakh) = Rs. 1.76 lakh (assuming no indexation benefit for simplicity).
However, since your ELSS investment is Rs. 1.00 lakh, which is more than the potential taxable LTCG of Rs. 1.76 lakh, your entire LTCG might be exempt under Section 80C.

Tax implication: With full exemption under Section 80C, you likely won't have any LTCG tax to pay for FY 2023-24.

IT Return Form:

Considering the potential for minimal or no taxable income, ITR Form 1 (Sahaj) might be suitable for you. However, it's always best to consult a tax professional for confirmation based on your complete financial picture.

Disclaimer: This is a simplified analysis based on the information provided. Consulting a registered tax advisor is recommended for personalized advice considering your specific tax situation and any other income sources you might have.