Taxability of ltcg

This query is : Resolved

Guest

Guest (Querist)

23 November 2013 My client has sold Shares of private limited company. There is LTCG.

I want to know whether LTCG on sales of PRIVATE LIMITED company is taxable at flat rate of 20% or any exemption is available under any section.

Since it is a private company, it cant be a listed company and its shares cannot be traded in a stock exchange.

Thanks.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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23 November 2013 Indexation will be allowed.

.
You may refer Section 54F and Section 54EC, for getting exemption.

Guest

Guest (Querist)

23 November 2013 there is no exemption under those sections. I just want to confirm rate of tax i.e 20%

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CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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23 November 2013 Yes sir, rate of tax is 20% for LTCG.

CA VISHNU GAVKARE

CA VISHNU GAVKARE (Expert)
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23 November 2013 you may take 10% rate without availing Indexation benefit

Prof. Bajaj

Prof. Bajaj (Expert)
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23 November 2013 If you dont use indexation, then you can pay 10% tax on LTCG.

Rather you can work out tax liability with and without indexation and then choose the lower one.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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23 November 2013 Though as per proviso to section 112, 10% rate has been prescribed, but the same is applicable in case of listed securities or units or zero coupon bonds. In this particular case of Pvt Ltd Co shares, 10% rate is thus not applicable. Hope experts will agree with me.

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