LTCG Grandfathering Calculator
Equity LTCG was tax-free until Budget 2018 reintroduced it. To avoid taxing gains that accrued in the tax-free era, purchases made before 31 January 2018 are 'grandfathered': your cost of acquisition is stepped up using that day's fair market value, so only appreciation after 31 Jan 2018 is taxed.
The stepped-up cost is: the higher of your actual cost and the lower of (FMV on 31 Jan 2018, your sale price). Enter the three prices and quantity; the calculator shows the grandfathered cost, the taxable gain with and without grandfathering, and the tax saved.
How it works
- Grandfathered cost per share = max(actual cost, min(FMV on 31-01-2018, sale price)).
- LTCG = (sale price − grandfathered cost) × quantity, then the normal ₹1.25 lakh exemption and 12.5% rate apply.
- The FMV used is the highest traded price of the share on 31 January 2018 (for unlisted-that-day shares, the last traded day before it; for funds, that day's NAV).
Frequently asked questions
Why 31 January 2018 specifically?
Budget 2018 (presented 1 February 2018) reintroduced LTCG on equity. 31 January 2018 was the last trading day before the announcement, so it became the cut-off for locking in tax-free appreciation. The rule survives unchanged into the current 12.5% regime.
Where do I find the 31 Jan 2018 FMV for my shares?
It is the highest price the share traded at on NSE/BSE on 31 January 2018 — exchanges and most brokers publish these lists, and broker capital-gains statements usually apply the FMV automatically. For mutual funds it is that day's NAV, shown in the fund house's statement.
Why does the formula also involve my sale price?
The min(FMV, sale price) leg prevents the step-up from manufacturing artificial losses: if the stock now trades below the 31-Jan-2018 FMV, your deemed cost is capped at the sale price, making the gain zero rather than negative. Grandfathering can eliminate a gain but cannot create a loss.
Does grandfathering apply along with indexation?
No — listed equity under Section 112A never had indexation, at the old 10% rate or the current 12.5%. Grandfathering (the FMV cost step-up) is the only cost adjustment available on pre-2018 equity holdings.
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This tool is an educational estimate, not investment or tax advice. Rates and rules change — verify current figures and consult a professional before acting.