Tax on Short-Term and Long-Term Capital Gains

Tax on Short term capital Gains (STCG) – Section 111A

Short Term Capital AssetRate of Tax
Any STCG  arising from transfer of equity shares or units of equity oriented fund on which Securities Transaction Tax(STT) has been paid 15%
Any STCG  arising from a transaction undertaken in foreign currency on a Recognized stock exchange located in an IFSC even though on which Securities Transaction Tax(STT) has been not paid 15%

Note: STCG arising on transfer of other Short Term Capital Assets would be charged at Normal Rates of Tax.

Tax on Long term Capital Gains (LTCG) – Section 112

Long Term Capital Asset Rate of tax
Unlisted securities, or shares of a closely held company Non-corporate non-resident/ foreign company – 10% without the benefit of indexation and currency fluctuation
Other Assessees – 20%, with indexation benefit
Listed securities other than a unit) or a zero- coupon bond – 10%, without the benefit of indexation or
– 20%, availing the benefit of indexation whichever is  more beneficial to the assessee
Other Assets – 20%

Tax on Long term Capital Gains on certain assets – Section 112A

Long Term Capital AssetRate of Tax
Any LTCG exceeding Rs.100000 arising on transfer equity shares or units of equity oriented fund on which STT has been paid at the time of acquisition of such shares   10%
Any LTCG exceeding Rs.100000 arising from a transaction undertaken in foreign currency on a recognized stock exchange located in an IFSC even though on which STT has been not paid   10%

Note :

  • In case of a resident individual or a Hindu Undivided Family (HUF), the long-term capital gain taxable u/s 112 or 112A or short-term capital gain taxable u/s 111A shall be reduced by the unexhausted basic exemption limit and the balance shall be subject to tax.
  • No deduction under Chapter VI-A can be claimed in respect of such long-term capital gain chargeable to tax u/s 112 or u/s 112A or short-term capital gain chargeable to tax u/s 111A.
  • Rebate u/s 87A is not available in respect of tax payable @10% on Long-term Capital Gains u/s 112A.

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