Mr. Jaitley in his budget speech mentioned grandfathering as a concept with reference to computation of Long Term Capital Gain on which he has introduced tax at 10 percent
However there can be lot of confusion with respect to this concept. Let's understand this concept simply
If you bought any share last year (and not completed 1 year) - your revised cost will be yesterday high price and not actual price. So LTCG will be applicable at price what u sell from now on compared with revised cost on 31st Jan
Understanding LTCG Tax under Grandfathering concept with simple example
Suppose you buy Stock A at Rs 100 on 31Jan 2017 or before
High of stock (not closing price) on 31Jan 2018 = Rs 220
You sell Stock A at Rs 240 on 1st Feb 2018 or after
Your Tax Liability = Rs 20/share (10%) if total profit is higher than 1 lakh
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