Selling shares

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ravi chandra rachakonda (Querist)
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24 February 2014 Hi Sir,

I have purchased few company shares in share market (equity) almost 3-4 years back.

Now I am making some profit on it.

If I sell my shares now

1) Will it attract any tax ?

2) Do I have to mandatory show them in my Income Tax return filing ?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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25 February 2014 1. Capital gain is attracted on sale of shares.

2. However since the shares were held for more than 12 months, they are long term capital asset and LTCG will arise.

LTCG on shares is exempt if they are sold on a recognised stock exchange.

3. You should show the income from above shares under the head exempt income.

ravi chandra rachakonda

ravi chandra rachakonda (Querist)
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25 February 2014 Sir,

1) if I sell my shares in NSE or BSE then will it be exempt from LTCG ? by the way what is LTCG

2)where is this section "INcome from above shares under the head exempt income" present ? DO I have to attach any proofs etc for this at the time of return filing ? Could you please elaborate

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CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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26 February 2014 1. NSE and BSE are recognised stock exchanges. If you sell the shares on NSE or BSE, the capital gain will be exempt.

2. LTCG means Long Term Capital Gain. If shares are held for a period of more than 12 months, then they are called Long Term Capital Asset. Any gain arising on Long Term Capital Asset is known as Long Term Capital Gain.

3. LTCG arising on sale of shares is exempt u/s 10(38)