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Short term capital gain tax on unlisted shares

Mohit Sharma (Student) (56 Points)

10 August 2020

What is the charging provision for short term capital gain tax on unlisted shares under Income Tax Act, 1961?

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6 Replies

rama krishnan (12239 Points)
Replied 11 August 2020

For short term capital gains, the charging section is always section 45 but the rate of tax is as per the slab rate

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Mohit Sharma (Student) (56 Points)
Replied 11 August 2020

Hi,

Thanks for replying. You are correct about the charging provision. Where is it given that short-term capital gains tax on unlisted shares will be charged as per the income tax slab? Under WHICH SECTION of Income Tax Act, 1961?

rama krishnan (12239 Points)
Replied 11 August 2020

Sir please refer section 111A. it speaks about tax rate of listed shares @ 15%. when there's no specific rate is defined, it should be understood that the same should be taxed at the existing Slab rates according to the type of person

Mohit Sharma (Student) (56 Points)
Replied 11 August 2020

Thanks for replying Sir. I agree with what you said but there must be a provision under Income Tax Act, 1961 which says so. I am looking for that provision. Can you help with that?

rama krishnan (12239 Points)
Replied 11 August 2020

Generally the rates of tax for all kinds of assessee's are given every year in the finance act. except that the income that has to be assessed at the special rate are given the respective sections. so when there's no specific section which taxes a particular income at specific rates, it has to be assessed at the slab rates . to the best of my knowledge, there's no provisions in the act which prescribes tax rate for unlisted shares. let's wait for experts advice

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Mohit Sharma (Student) (56 Points)
Replied 13 August 2020

I agree that there is no section which specifically prescribes the STCG rate for unlisted shares. However, I am looking for a section which says that "when there is no specific section, income tax slabs rates will be applicable".

Thanks for the reply!