How does MProfit consider the LTCG Grandfathering rule while computing capital gains?

In this tutorial, we will explain the grandfathering rule to compute capital gains for stocks in MProfit.

Follow the steps below:

Step 1: Login to your MProfit account and double-click Infosys.

Step 2: For the Period, choose All To Date from the drop-down list.

Step 3: For example:

Purchase of Shares (March 16, 2016):

Purchase 100 shares.

Price per share: 1100 rupees.

Sale of Shares (February 14, 2024):

Sell 50 shares.

Price per share: 1500 rupees.

Application of Grandfathering Rule:

Identify the highest price (fair market value) for Infosys on January 31, 2018.

Capital Gains Calculation:

Calculate the capital gains for the shares sold using the grandfathering rule.

Determine Tax Liability:

Apply the applicable tax rate to the capital gains calculated.

To confirm this, please follow the steps mentioned below:

Step 1: Click Reports.

Step 2: Select Capital Gains.

Step 3: Choose Capital Gains - ITR Format.

Step 4: Click Stocks.

Step 5: As the shares were sold in the current financial year.

Click Period and select Current Financial Year.

Step 6: Click Generate Report.

The report indicates that on January 31, 2018, the fair market value (FMV) stood at 1166.60. The analysis involves comparing the FMV with the sale price, opting for the lower of the two. 

This resulting value is then contrasted with the purchase price. In this instance, the FMV is lower than the sale price, prompting comparison with the purchase price. 

Since the FMV surpasses the purchase price, the acquisition cost is deemed to be 1166.60. Subsequently, capital gains are computed based on this figure.

This is how you can seamlessly consider the LTCG Grandfathering rule while computing capital gains in MProfit!