What is the treatment cost of Cancer and how to protect it Financially?

In 2015, about 90 million people had Cancer and 8.80 million deaths occurred due to this dreaded disease which is also the second leading cause of death globally. According to World Health Organization (WHO) nearly 10 Lakh new cases are reported every year in India. Unfortunately, nearly 5 Lakh people annually die in India due to cancer and this number will go up and projected to raise five folds by 2025, according to WHO.

During 2016, estimated 1.5 lakh new breast cancer cases have been registered (over 10 per cent of all cancers) in India. Breast Cancer is the number one Cancer followed by lungCancer with estimated 1.14 lakhs cases, according to a premier medical research organisation in India.Cervix is the third most common cancer in India with estimated 1 lakh new cases reported in 2016 according to The Indian Council of Medical Research (ICMR).

The alarming statistics above can make any one depressed and anxious but the fact is that Cancer is now a common disease globally and different types of cancer are being diagnosed every day.

costs

What is the treatment cost of Cancer?

The treatment of Cancer is spiralling with discovery of new drugs and technology. As you may know, in India, the cost is so high that it may wipe out the entire savings of the family and thus ruin the financial future of the family.

In a Cancer treatment, it is next to impossible to put up a cost rate because every cancer case is different.

Difference arise from the organ affected  ( Primary organ and secondary organs that cancer has metastated to ) Further, the mode of treatment and drugs usage changes as per stage of cancer. Hence, the closed estimate of treatment can be provided only after evaluation of your medical reports like CT scan,USG,Biopsy reports etc..

However, there is a way by which you can protect this – the answer is Cancer Protection Plan offered by life insurance companies. But before we discuss that, let us see some example of the tentative costs involved (it may vary from one institute to the other) in treatment of Cancer.

The cost of treating cancer may range from Rs 5 lakh to Rs 25 lakh approximately in six months’ time frame depending upon the stage of diagnosis. Also, people diagnosed with cancer may not be able to continue with their routine income-earning job which may result in loss of regular income.

  • Breast cancer surgery can cost Rs 3,00,000 to Rs. 5,00,000
  • Chemotherapy – The cost depends on the drug applied and the number of sessions. Approximate cost can vary between 50,000 – 100,000 for each session
  • Radiation – This therapy can cost Rs 150,000 – 250,000 per cycle
  • A PET-CT Scan can alone cost Rs 25,000 – 40,000

Source: For costing

Cost of Cancer Treatment in India for all major cancers

How to protect oneself from Cancer

If you have a regular health insurance plan or mediclaim insurance, it pays for the hospitalization cost upto the extent of the sum assured taken. Also, if you have taken a critical illness rider, the life insurance company pays the rider amount immediately on diagnosis of the disease without submission of any bill.

However, as you have seen, the cost of Cancer treatment is so high that, a regular health plan may not be enough to recover the entire treatment cost. Likewise, the coverage in a critical illness rider policy is limited and if you add that too, still it may not be sufficient to recover the entire treatment cost involved for the prolonged period.

The Best Health Insurance Plan for the Diabetic Patients

The answer lies in taking a cover exclusive to Cancer – The Cancer Protection Plan.

How the cancer Protection Plan works

Cancer Protection Plan is normally offered between age 18 to 65 years and it can be taken for 10, 15 or 20 years or 80 year minus age at entry. Sum assured taken can be from 10 Lakhs to maximum 40 Lakhs.

Cancer Protection Plan may come in many variant. For example – Lump sum cover and Lump sum cover with income benefit. In ‘Lump Sum Cover’ the fixed payout is made on diagnosis of cancer and in ‘Lump Sum Cover with Income Benefit’, one can receive a fixed percentage of the Cancer cover amount monthly for few years,over and above getting the lump sum amount on diagnosis of Cancer.

The other benefits of Cancer Protection Plan are that premium for these plans are generally low and in most cases medical examination is not required.

Our country continues to be one of the most under-penetrated in the world, as far as taking health protection plans are concerned. Not even 1% of the total population is insured for health coverage even though there has been a growing awareness of health insurance products. Since Cancer treatment is long-term in nature, it also translates into a recurring expenditure and loss of pay due to a prolong absence from work. This is the reason why one must have a Cancer Protection Plan exclusively over and above the regular health plan.

Even though Cancer is dreaded and the treatment can be prolonged, a Cancer Protection Plan can help not only fight with Cancer but also helps to protect your life’s savings.

 

 

 

(Insurance is the subject matter of the solicitation. For more details on the risk factors, term and conditions please read sales brochure of the respective companies carefully)

 

Source : Priyanka Chakrabarty

 

Top 5 sectors to invest after budget allocation

There are all efforts in Union Budget 2018 to appease rural and EWS population but at the same time Government tried to maintain the fiscal discipline by keeping fiscal deficit target at 3.5% and 3.2% for FY18E and FY19E, respectively.

Although deficit targets are higher as compared to previous estimates but considering surge in prices of crude oil, these are respectable numbers.

Higher than estimated expenses and lower than expected revenue on account of lower GST collection and no spectrum auctions lead to miss on fiscal deficit targets.

Budget speech has talked about total expenses from all agencies at Rs.14 lac crore towards aiding rural economy/farmers’ income.

Here are the top 5 sectors to invest after budget allocation

Rural Spending:

This will have a far-reaching impact on growth rates of country and reduction of income gaps in society. Companies and sectors deriving the majority of revenues from the rural economy like 2 wheelers, FMCG Companies, fertilizer companies will benefit from the push to rural spending. Positive for HUL, Hero Motocorp, ITC, Godrej Agrovet to benefit from the move.

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Infrastructure:

Budget 2018 continued to put a strong focus on infrastructure development, which is in line with the expectations. FM has allocated extra-budgetary support of Rs. 5.97 lakh crore v/s Rs. 3.96 lakh crore in the last budget for the infrastructure sector, which is encouraging as India needs a significant amount of investment in infrastructure due to growing needs.

Higher allocation in infrastructure segment will essentially expedite infrastructure development in the country, which in turn will aid many industries, i.e. metals, cement, building materials, etc.

How to choose the best mutual fund for your portfolio

Construction companies like KNR Construction, J Kumar, NCC to play infrastructure theme from the budget. Positive for cement companies like JK Cement and Sagar Cement to benefit from push to infra.

Healthcare:

Union budget has also proposed coverage of Rs. 5 Lac per household to total 10 Cr households for hospitalization. The move will benefit hospital chains like Apollo Hospitals and Narayana Hrudyalay.

It will also have a positive impact on companies like Thyrocare and Dr. Lal Path Labs. Insurance companies will also benefit because of insurance premium received towards coverage of families.

Affordable Housing:

Among other major initiatives budget has proposed the creation of affordable housing fund under NHB. This will benefit all affordable housing players like Mahindra Lifespace, Ashiana Housing, etc.

It will also have a positive impact on affordable housing financiers like Gruh Finance, DHFL, and Can Fin Homes.

Tyres:

Within tax proposals, the budget has proposed to increase customs duty on imported Truck and Bus Radials from 10-15 percent, which will benefit companies like Apollo Tyres and JK Tyres who have significant exposure towards truck tyres.

 

Disclaimer: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here.

Warren Buffett that may help you to create wealth in long-term

Warren Buffett’s quotes that can help you invest better in volatile times.

When stock markets turn volatile many investors find it difficult to stay the course. Some investors want to sell off and want to hoard their cash. Some prefer to start buying the stocks that are falling the most. But such knee-jerk reactions may not create wealth for you.

Here are five thoughts of Warren Buffett that may guide you in your investment actions in such volatile times.

1.It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

Quality matters. Just because a company has fallen 20% from its 52 week high does not make it a great value buy. Do check the fundamentals of the company. Corrections in the market must be used to buy quality stocks for your long-term portfolio. Buying them at a fair price makes sense for long-term investors. Good businesses tend to compound their profits and reward the shareholders in the long term. Stick to companies that have exhibited decent business performance across business cycles.

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Picking up the micro-cap stocks with great potentials may not reward you if the stories do not materialize as expected. If you have a dud stock in your portfolio, use the spikes to get rid of it. Use the proceeds to buy fundamentally strong companies.

2. Be fearful when others are greedy and be greedy only when others are fearful.

Volatile markets make investors worry about the holdings. The sudden drop in their portfolio’s valuations, make them consider selling out. The same investors were looking for more opportunities when the markets were marching up.

Behavioural issues are a big influencing factor for the retail investors. The emotional swings force them to sell out when it is the time to load up more. Warren Buffett makes it clear that the valuations are attractive when no one is interested in stocks and the other way round.

3. Someone is sitting in the shade today because someone planted a tree long time ago.

This could be one of the ignored quotes of Warren Buffett. It speaks about the delayed gratification and how it impacts one’s future.

If you sow the seeds in the form of regular investments and let them compound over a long period of time, there is a fair chance that you will see the wealth being created.

4. Never ask a barber if you need a haircut.

If you buy the idea of long-term wealth creation and start investing regularly, wealth creation is not guaranteed. You have to stick to asset allocation, and you have to choose the right products that suit your needs.

While choosing your advisor to be sure that his interests are aligned with your interests.

5. No matter how great the talent or efforts, some things just take time. There are no shortcuts – Warren Buffett says. Follow the process and the let the time work for you. The results will be more likely to be in your favour. However, if you try to put your money on tips and get rich quick tricks then you may see some nasty surprises.

‘Ujjwal Bharat’: ABSL Resurgent India Fund – Series 6 Review

Governments across the world are growing more and more socialist and development oriented. In India too, We have noticed that whenever the government has gone about focusing upon a part of the economy or a specific area, there has been long-term development followed by strong market returns for companies operating in that space.

NFOIT and IT-enabled businesses saw a huge surge in 1990’s on the back of favorable govt policy environment and industry growth. 1st half of previous decade saw an emphasis on Infra development, and the 2nd part saw financials taking fore while consumption remained a consistent theme all through. With the new (present) government coming in, Manufacturing got the limelight in 2014 & onwards. All these themes have followed up with strong returns for their investors in the years following govt policy & push. Since its ascent to power, the present government has been reiterating its growth & development agenda through various initiatives and policy directives. Over the past couple of years, the narrative has been gradually shifting to a more grass-roots level financial inclusion & growth and a more sustainable policy environment for ensuring equitable development of the rural and urban economy.

CHARTNote: Past performance of fund does not guarantee the future returns.

Download the Fund Comparison of series 1 to 5

Download (PDF, 90KB)

ujwal bharat

High Govt. agenda

Earlier ABSL launched the ABSL Banking & Financial Services Fund in December 2013, and it proved to be the best performing fund in the pack since that time (generated 30% p.a. vs ~24% p.a. by Nifty Financial Services Index since inception). January 2015 ABSL was launching the ABSL Manufacturing Fund which has delivered 12.9% p.a. vs S&PBSE 500’s 9.4% p.a. As a fund house, other investment calls have also delivered similar performances and are quite visible in the performance of the close-ended series (Resurgent India & Emerging Leaders) where Fund house bet on Small & Midcap in one series and GST theme in another. Almost all series have delivered significant alpha (in range of 2% – 6% p.a.) while being true to mandate.

Aditya birla banking and financial services fund : Review

With a similar moment in the making for Rural Transformation, ‘Ujjwal Bharat’ is the new investment destination of choice. Fund house believes that this theme is a multi-year theme and a strong return generator too. With a power packed team of Satyabrata Mohanty & Milind Bafna (we all know the past few years of superlative performance of ABSL Advantage Fund & ABSL Pure Value Fund) under the aegis of Mahesh Patil.

With the recent tailwind of Union Budget 2018, the government has announced its intent of transforming farmlands of the country into the new Urban! Let’s take advantage of this opportunity.

Salient Features of the NFO:

  • A theme of the fund is geared to benefit from the most significant focus area of the government – Ujjwal Bharat; Huge infra spend & ambitious initiatives by the govt will trigger a cascading effect to a lot of focus areas as well as allied sectors.
  • Multiple structural drivers and tailwinds across sectors aligned to the Ujjwal Bharat story – Agri Inputs, Auto & Ancillaries, Consumer (Discretionary, Durables & Staples), Financials (Banking & NBFCs)
  • Distinctive portfolio strategy to find rerating opportunities across the value chain of the sectors identified.
  • A multi-year theme that will continue to benefit from the strong growth already witnessed by companies across the beneficiary sectors – higher ROE / EPS growth / Sales growth.
  • Complements current investor portfolios with a differentiated theme
  • Correction in markets have already brought valuations to reasonably fair levels across the board

model porfolioAs a fund house, ABSL believes that while there are so many growth drivers for these, will result in rerating for many theme related companies, the unique portfolio strategy of considering 2nd & 3rd order beneficiaries of rural growth for investment will deliver that extra punch in the returns. Sectors like Auto & Auto Ancillaries, Building Materials, Banks & NBFCs, Consumer Staples & Durables, & Agri Inputs are some of the key sectors, where fund house see these potential multi-bagger opportunities.

oppertunity

Scheme Name: Aditya Birla Sun Life Resurgent India Fund – Series 6

NFO open date: 21 February 2018

NFO close date: 07 March 2018

Scheme Type: A close-ended Diversified Equity Scheme ( 3 years and 6 months )

Scheme objective: The investment objective of the scheme is to provide capital appreciation by investing primarily in equity and equity-related securities that are likely to benefit from recove in the Indian economy.

The Scheme does not guarantee/indicate any returns. There can be no assurance that the schemes’ objectives will be achieved.

Scheme Benchmark: S&P BSE 500

Asset Allocation: Equity & Equity related securities: 80%-100% | Money Market & Debt instruments: 0-20%

The scheme may invest up to 20% of the net assets of the scheme in derivative instruments.

Fund Manager: Mr. Satyabrata Mohanty & Mr. Milind Bafna

Mr. Satyabrata Mohanty: Mr. Mohanty is a B.Com (H), Chartered Accountant and CFA. He has been part of Birla group since last 17 years. He has over 12
Years of experience in Finance and Research. He has handled responsibilities across Fund Management (Equity & Debt), Trading and Credit Research functions. Prior to joining BSLAMC, he has worked with Aditya Birla Management Corporation Ltd & joined ABG
as a Management Trainee.

Download the Factsheet of Mr. Satyabrata Mohanty

Download (PDF, 115KB)

Alpha Return:mohanty

Mr. Milind Bafna: Mr. Bafna is a B.E. (Chemical). Prior to joining Birla Sun Life AMC he has worked with Motilal Oswal Financial Services and Reliance
Industries Ltd.

Download the Factsheet of Mr. Milind Bafna

Download (PDF, 97KB)

Alpha Return:

milindHighlights:

Why India is in recovery phase?

Indian economy has turned the corner and is possibly out of the low growth high inflation cycle. The macro trend for the year FY16 has been encouraging with key macro indicators like Current Account Deficit (CAD), Inflation and Foreign Institutional Investor (FII) flows showing improvements.

The term emerging markets symbolizes innovation lead evolution of the marketplaces, India being the fastest growing among EMs becomes the best bet globally. The concern on re-allocation of capital from India to China has subsided post the crash in Chinese equity markets.

In fact, India stands tall as one of the strongest EMS in terms of flows, investor confidence, and performance. We can assign a decent probability to reverse inflows owing to India’s position among the EMs.

The global markets are slowly recovering, India too is set to deliver excellent growth in the medium to long term owing to strong, stable government, improving macros & supportive global sentiment. In addition to this institutionalization of finances by means of demonetization & implementation of GST is likely to result in better capacity utilization & improved earnings for Indian corporates.

India outlookPositive Macros & Key Growth Indicators:

Improving macros like improving PMI index, moderate commodity prices, lowering trade deficit, & govt target of attaining fiscal deficit of 3.2% indicate that the boom is underway.

With the implementation of GST, the tax advantage enjoyed by the unorganized sectors will be reduced significantly & cost of production will go down resulting in the better capacity utilization & growth of the formal economy.

The government has come up with numerous initiatives like ‘Make in India’, ‘Digital India’,‘Financial Inclusion’ etc. that have supported domestic growth as well.

Do Not Compare Yourself with Other Investors While Making Investment

Demonetization has institutionalized the finances further from here the implementation of GST is expected to result in better governance and higher revenue for the government; thus govt.spending in the economy is likely to increase.

Fund house believes in the current scenario; the 8 R’s would be driving the return from equities. Reflation trade taking a bit of set back getting flows back to India, Republicans providing checks and balance for Trumponomics, Remonetization of currency leading to normalization of growth, Rates getting transmitted into the system, Reform process to continue from the government, stability of the Rupee, hopefully a good Rainfall and most importantly Rebound in earnings. These 8 Rs would lead to the most import R which is Returns in the market.driver of ujwal

Risk factors:

Mutual Funds and securities investments are subject to market risks, and there can be no assurance or guarantee that the objectives of the Scheme will be achieved.

Investment in Mutual Fund Units involves investment risks such as trading volumes, settlement risk, liquidity risk, default risk including the possible loss of principal.

The present scheme is not a guaranteed or assured return scheme.

RISK FACTORS ASSOCIATED WITH INVESTMENTS IN FIXED INCOME SECURITIES:

Price-Risk or Interest-Rate Risk, Credit Risk, Liquidity or Marketability Risk, Reinvestment Risk, Pre-payment Risk, Concentration Risk, etc…

Mutual Fund Investment are Subjected to Market Risks, Read all Scheme Related Document Carefully.

Disclaimer: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here.

 

Mutual fund Strategy: Time to invest in accrual and short-term bond funds

The RBI in its bi-monthly policy review yesterday kept the repo rate unchanged at 6% and continued with the neutral stance.

The investors should stay away from long term bond funds and go for accrual funds and short term funds.

Here is what experts say :

Amit Tripathi, CIO – Fixed Income Investments, Reliance Mutual Fund

The tone in the policy was very balanced. The RBI is more focused on medium term drivers of growth and inflation, and wants to support the nascent recovery. The markets are pricing in many risks that RBI highlighted in its policy. Given RBI’s pragmatic approach and current market levels, one can expect some near term stability in bond yields, which have been very volatile of late.

The overall macro resilience of the economy remains high. However, we are clearly no longer in a rate easing cycle. Investors should prefer moderate duration portfolios with reasonable carry (accrual) for the bulk of their fixed income allocations.

R.Sivakumar, Head-Fixed Income, Axis Mutual Fund

We expect long bond yields to be range bound. However, the lack of a negative is not a positive, and even at current levels, we do not see value in long bonds given the duration risk involved.

Short rates have also sold off in recent months, with the 1-year certificate of deposit now yielding about 7.5% (compared to 6.5% in November). The entire short end of the curve (1-5 years) now appears to have “overpriced” the risk of tight liquidity and RBI policy stance. We see better value in this segment. Moreover, as the broad macro economy improves, we are also seeing improvement in corporate earnings, which is positive for corporate bonds – especially in the non-AAA space. 

Investors with a medium term holding horizon should look to short and medium term funds, while those with a short-term holding period should consider liquid and ultra-short funds.

Debt market

Pankaj Sharma, CIO- Fixed Income, DSP BlackRock Mutual Fund

In lines with market expectations, RBI has kept rates unchanged and maintained the neutral stance. The status quo on rates and a neutral stance indeed reflect a repeat of the balanced tone as witnessed in the December MPC. That said, we believe that macro variables have moved towards the negative territory over the past 2 months as factors like crude oil, yields in developed markets moving higher, fiscal slippage on the domestic front and prospects of change in MSP mechanism do not augur well for interest rates to head lower.

Hence, we maintain a bias for reversal in the interest rate stance sooner than later. Bond yields have been pricing the same and this policy for now will resist hardening of yields from current levels.

From a market perspective, the outcome of the policy is in line with market expectations and hence the immediate reaction is relatively muted.

Lakshmi Iyer, CIO (Debt), Kotak Mutual Fund

The bond markets in India have been witnessing significant volatility lately. The 10-year G – sec yield has risen from the low of 6.37 percent in the month of Jan 2017 to 7.52 percent as of date.

By any count, this is a major bear grip on the market. The bond market has been wary on two counts — One is the rising CPI inflation and the second is the slipping fiscal deficit.

The market was slightly circumspect in light of fiscal slippage and was expecting a stern stance. In contrast, the RBI came with status quo accompanied by a milder stance. This came as a sign of relief for an excessively bearish market. We believe that the central banker’s policy stance would be increasingly data driven and were the crude prices to behave favourably; we may be in for a long pause.

Know more About P/E Ratio and its Significance

We believe that markets globally and in India may witness intermittent bouts of volatility in the bond market. Investors thus can utilise tactical asset allocation strategies to benefit from rising opportunities in the debt market.

Relatively high accruing yields and limited NAV volatility make a strong case for investment in accrual/short-term fund segment. For those seeking to lock into current yield, levels could look at allocation to fixed maturity plans (FMPs).

Bottomline, the policy statement has put a lid on to the markets ultra bearish imaginations and going forward global and domestic data points would be watched for by policymakers as also market participants.

Kumaresh Ramakrishnan , CIO-Fixed Income, DHFL Pramerica Mutual Fund.

“We expected a very cautious tone in the policy document and not expecting a rate hike anytime soon. We had expected the policy document to refer to the slippage in fiscal numbers as stated in the budget announced on Feb 1”

He also says that investors looking to invest in fixed income can go for short term debt funds as they will have low volatility. Investors who are willing to take a bit of risk may go for accrual funds.

“Investors who are completely risk-averse or wish to take the minimum risk possible may go for Fixed Maturity Plans (FMPs),

Existing Investors in long term debt funds should revisit their portfolio and allocate a part of their corpus to short term debt funds.

Since a rate hike cannot be ruled in the coming months, investing in long-term debt funds doesn’t make sense anymore. A rising interest rate scenario is bad news for debt funds, especially long-term debt funds, because of the inverse relationship between yield and prices.

Dwijendra Srivastava, CIO-Debt at Sundaram Asset Management Company
10-year benchmark government securities (G-Sec) closed at 7.53%. “Given the current situation we foresee a rate hike in the next financial year. But the quantum of the rate hike and when it would be announced is difficult to predict at this point of time.” He also added that the 10 year yield will continue to remain in the range of 7.4% – 7.6% in the next few months.
 
Note : Past performance of fund does not guarantee the future returns.

Mutual Fund Investment are Subjected to Market Risks,Read all Scheme Related Document Carefully.

Disclaimer: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here.

How you can calculate long term capital gains of your mutual fund investment

In a frequently-asked-question series released on 5th Feb 2018, the Central Board of Direct Tax (CBDT) has given four different scenarios to calculate long gains tax on mutual funds.

LTCG MF

Let us look at the scenarios:

Scenario 1: If Mr. X has bought an MF unit on November 15, 2016 at Rs.100, its fair market value is Rs.200 on January 31, 2018, and he has sold it on April 1, 2018 at Rs.250. As the actual cost of acquisition is less than the fair market value as on January 31, 2018, you will have to take the fair market value of Rs.200 as the cost of acquisition and the long-term capital gain will be Rs.50 (Rs. 250 – Rs.200).

Scenario 2: Again, if Mr.X has acquired an MF unit on November 15, 2016 at Rs.100, its fair market value is Rs.200 on January 31, 2018, and it is sold on April 1, 2018 at Rs.150. In this case, the actual cost of acquisition is less than the fair market value as on January 31, 2018. However, the sale value is also less than the fair market value as on January 31, 2018. In such a case, you will have to take the sale value of Rs.150 as the cost of acquisition and the long-term capital gain will be NIL (Rs. 150 – Rs. 150).

How to choose the best mutual fund for your portfolio

Scenario 3: An MF unit is acquired on November 15, 2016 at Rs.100, its fair market value is Rs.50 on January 31, 2018, and it is sold on April 1, 2018 at Rs.150. In this case, the fair market value as on January 31, 2018 is less than the actual cost of acquisition, and therefore, the actual cost of Rs.100 will be taken as actual cost of acquisition and the long-term capital gain will be Rs.50 (Rs. 150 – Rs. 100).

Scenario 4: An MF unit is acquired on November 15, 2016 at Rs.100, its fair market value is Rs 200 on January 31, 2018, and it is sold on April 1, 2018 at Rs.50. In this case, the actual cost of acquisition is less than the fair market value as on January 31, 2018. The sale value is less than the fair market value as on January 31, 2018 and the actual cost of acquisition. Therefore, the actual cost of Rs.100 will be taken as the cost of acquisition in this case. Hence, the long-term capital loss will be Rs.50 (Rs. 50 – Rs. 100) in this case.

Such a loss can be set-off against any other long-term capital gains and you can carry it forward to subsequent eight years for set-off against long-term capital gains.

LTCG

Budget talks about Rs.1 lakh exemption. How is this to be calculated?

Long-term capital gains realised from all transactions under sale of equity shares and equity MF schemes during the financial year will be aggregated. For example, if the total of the long-term capital gain is at Rs.2 lakhs in the financial year, then the investor has to pay LTCG tax of 10% on Rs.1 lakh only.

What is grandfathering?

Grandfathering means the exemption granted to investors on the gains made by them before the new provisions come into force. This is more of a comfort clause while migrating from an easier to a strict tax regime. The government intends to grandfather or exempt gains made until January 31, 2018.