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Capital Gains Tax

DEBDUTTO MUKHERJEE (Senior Business Analyst) (43 Points)

10 October 2007

Dear Friends,

If I invest in Equity market through a DP Account, and have Capital Gains in short-term, will I be liable to Short Term Capital Gains Tax if the Capital Gain remains in the DP Account which I ultilise to invest in more shares without transfering the Gain into the Bank Account.

Looking forward for some insight into this matter.

Thanks

Deb

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5 Replies

sajiri shah (CA Final) (112 Points)
Replied 11 October 2007

hi.. i ve been trading since 5 years n according to me u will have to pay the STCG tax even if u re-invest the same..

ravi sankar (Chartered Accountant) (157 Points)
Replied 14 October 2007

Dear The condition for exemption is 1) investment in Equities and "not" in DP account 2) CG should be long term In your case both conditions are not satisfied. Hence you have to pay STCG tax.

Vk Duggal (320 Points)
Replied 16 October 2007

Long term capital gain is exempt and hence the condition No. 2 stated by Mr. Ravi is of no use if security transaction tax is paid. You will have to short term capital gain tax if security transaction tax is paid.

ravi sankar (Chartered Accountant) (157 Points)
Replied 18 October 2007

Hai. I stated the conditions for investment in equities to get exempted. It is of no use for short-term gains. there is no exemptions for short-term gains. Itax will have to be paid. Security transaction tax is not covered by IT and has no relevance to IT

(Guest)

Hi Debdutto.. You are liable to pat STCG at the rate of 10%. The criteria that is applicable is realization of shares and receipt of amount. Even if you keep the funds with DP, you are said to realize the amount so liable to pay STCG. The instance of LTCG is not applicable as transaction through DP are subject to STT.