Vivek Agarwal FCA, CS, LLB
Quick Summary
[SECTION 112A] TAX ON LONG TERM CAPITAL GAINS ON CERTAIN ASSETS 1. What type of assets are covered? Ans: (a) an equity share in a company or (b) a unit of an equity-oriented fund or 2. What is the rate of tax under this section? Ans: A concessional rate of tax @10% will be leviable on t
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FAQ :
A concessional tax rate of 10% is applicable on long-term capital gains from equity shares, provided the gains exceed £1,00,000.
To avail the 10% tax rate, Securities Transaction Tax (STT) must have been paid on both the acquisition and transfer of the equity shares.
For shares acquired on or before 31st January 2018, the cost of acquisition is the higher of the actual cost or the fair market value as of 31st January 2018, capped at the full value of consideration received on transfer.
Yes, resident individuals or HUFs can utilise their unexhausted basic exemption limit to reduce the taxable long-term capital gains before applying the 10% tax rate.
No, deductions under Chapter VI-A are not allowed to be claimed against long-term capital gains on equity shares taxed under this section.
Equity shares must be held for a minimum period of twelve months from the date of acquisition to be considered long-term capital assets for this tax benefit.
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