01/08/2018
LONG TERM CAPITAL
GAINS TAX @ 10%
IMPORTANT POINTS :-
·
Tax
on Long Term Capital Gains exceeding INR 1 Lakh at the rate of 10% , without
allowing any indexation benefit. However, all gains upto 31st Jan,
2018 will be grandfathered (Mean exempt from LTCG Tax).
·
Proposal
to introduce tax on distributed income by Equity Oriented Mutual Fund at the
rate of 10%.
·
LTCG arising from transfer of listed equity
shares, units of equity oriented mutual fund & unit of a business trust are
exempt from tax.
Sale of Shares (31st Mar, 2018) :-
BEFORE
:- Exempt
AFTER :- Taxable
Cost of Acquistion :- HIGHER Actual (Bought before Feb 1, 2018)
LOWER of
:- FMV (31/03/2018)
Sale Value
LTCG Taxed @ 10% :-
1> All listed equity shares where STT
(Securities Transaction Tax) is paid on purchase & sale.
2> Units of equity oriented mutual fund
where STT is paid.
3> LTCG tax on gains upto INR 1 Lakh in
one financial year from
2018-19.
PRACTICAL CASES
1> DATE OF PURCHASE = 1/02/2016
DATE OF SALE = 25/03/2018
Purchase Value = INR 100
Sales Value = INR 130
Fair Market value = INR
120
Therefore, Sale Price –
Cost of Acquisition
= INR (130-120) = 10
Note : Exempt from tax
because before 31/03/2018
2> DATE OF PURCHASE = 1/02/2016
DATE OF SALE = 1/04/2019
Purchase Value = INR 100
Sales Value = INR 130
Fair Market value = INR
120 (31/3/18)
Therefore, Sale Price –
Cost of Acquisition
= INR (130-120) = 10 LTCG
Tax on LTCG = INR (10 *
10%) = INR 1
3> DATE OF PURCHASE = 1/02/2018
DATE OF SALE = 1/04/2019
Purchase Value = INR 100
Sales Value = INR 130
Fair Market value = N.A.
Therefore, Sale Price –
Cost of Acquisition
=
INR (130-100) = 30 LTCG
Tax on LTCG = INR (30 * 10%) = INR 3
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About the author
KESHAV THAKUR
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