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TAX ON CAPITAL GAINS

 

A.      Short Term capital assets [Section 111A]

(1)       Short term capital asset being equity shares in a company or units of equity oriented fund where transaction is covered under Securities Transaction Act

The tax on gain from such transaction shall be calculated in following manner : —

(i)         The rate of tax on gain from Short term capital asset being equity shares in a company or units of equity oriented fund where transaction is covered under Securities Transaction Act; shall be 15% of such gain;

(ii)        Such gain shall be reduced out of total income and balance income shall be deemed as total income on which the schedule of rates as applicable to an individual shall be applied.

(iii)       In case balance income which is deemed as total income is less than the exempted limit of ` 2,00,000 in case of individuals both males and females, ` 2,50,000 in case of senior citizens and ` 5,00,000 in case of super senior citizens, then an amount equal to the difference between the exempted limit and balance deemed total income shall be reduced from gain on Short term capital asset being equity shares in a company or units of equity oriented fund where transaction is covered under Securities Transaction Act; and balance gain on Short term capital asset being equity shares in a company or units of equity oriented fund where transaction is covered under Securities Transaction Act; shall be assessed to tax at the rate of 15%.

(iv)       For allowing deductions u/s 80C to 80U the total of all deductions cannot exceed gross total income as reduced by an amount of capital gains, if any.

(2)       Short term capital assets other than those referred to in (a) above.

The gain on any other short term capital asset shall form part of total income and shall be subject to tax at the same rates which are applicable to an assessee.

B.      Long term capital gain [Section 112]

(1)       Long term capital asset being equity shares in a company or units of equity oriented fund where transaction is covered under Securities Transaction Act
Any income from transfer of Long-term capital asset being equity shares in a company or units of equity oriented fund where transaction is covered under Securities Transaction Act is fully exempted u/s 10(38).

(2)       Long term capital asset being listed securities or units where securities transactions tax has not been paid on transfer

Long term capital gain from such assets shall be subject to tax

  1.  @ 10% of such gain if such gain is computed without indexing the cost of acquisition; or

(ii)        @ 20% of such gain if such gain is computed after indexing the cost of acquisition; whichever is less.

(3)       Long term capital asset other than as mentioned at (a) and (b) above

(i)         The long term capital gain shall be assessed to tax @ 20% of such gain for all assesses.

(ii)        Such gain shall be reduced out of total income and balance income shall be deemed as total income on which the schedule of rates as applicable to an individual shall be applied.

(iii)       In case balance income which is deemed as total income is less than the exempted limit of ` 2,00,000 in case of individuals both males and females, ` 2,50,000 in case of senior citizens and ` 5,00,000 in case of super senior citizens, then an amount equal to the difference between the exempted limit and balance deemed total income shall be reduced from gain on long term capital asset and balance gain on long term capital asset shall be assessed to tax at the rate of 20%.

C.      Adjustments

1.         For allowing deductions u/s 80 Gross Total Income shall be reduced by long term capital gain and balance amount shall be deemed as Gross Total Income for this chapter.

2.         In case of Individuals and H.U.F. if balance total income is less than exempted limit, the long term capital gain shall be reduced by such amount by which the total income falls short of exempted limit and on balance long term capital gain tax shall be calculated.

 
More Topics ... @ ' Capital Gain'

Capital Gain , Capital Assets & Property for Computing Capital Gain
Types of Capital Assets for Computing ‘Capital Gain’
Types of Capital Gains for Computing ‘Capital Gain’
Computation Of ‘Period Of Holding
 Transfer Of A Capital Asset [Section-2(47)]
Transactions Not regarded as ‘Transfer’ [Section-47]

Capital Gain is Deemed to be the Income of the Previous Year
Amount Received from insurer [Section-45(1A)] for Computing Capital Gain
Transfer of Capital Assets by a person to firm, AOP or Body Of Individuals (BOI) [Section 45(3)] for Computing Capital Gain
 Enhancement of Compensation on Compulsory Acquisition of Assets [Section-45(5)] for Computing Capital Gain
Sale of units Purchased for Deduction U/s 80 CCB [Section-45(6)]
Distribution of Assets by A Company in Liquidation for Computing Capital Gain
Capital Gain on Purchase by A Company of its Own Shares or Other  Securities [Section 46A]
DEEMED CAPITAL GAIN [Section 47A]
Method of Computing Capital Gain [Section 48]
Expenses Disallowed u/s Section 48 for Computing Capital Gain
Cases in which the Indexation of Cost is not to be done while Calculating long Term Capital Gain
 Computation of Capital Gain in Case of Non-Residents [Sec. 48 Proviso 1 ]
Determination of Cost of Acquisition for Computing Capital Gain.
Taxation of Gain on ‘Slump Sale’ for Computing Capital Gain
Special Provision for full Value of Consideration in certain cases (Section 50C] for Computing Capital Gain
Treatment of Advance Money Received and Forfeited (Section-51] for Computing Capital Gain
Cost of Acquisition of Goodwill [Section-55(2)(a)] for Computing Capital Gain
Cost of Acquisition of Shares [Section 55 (2) (v)] for Computing   Capital Gain
Capital Gains Exempted u/s 10
Capital Gains—Exempted u/s 54
 Capital Gain on Transfer of Self-Cultivated Agricultural Land in Urban   Areas [ Section 54 B]
Capital Gains on Compulsory Acquisition Of Land And Buildings [Section 54D]
 Capital Gain on Transfer of any Long Term Capital Asset [Section-54EC]
Exemption of Capital Gain on Transfer Of Long-Term Capital Assets in case of Investment In Residential House [Section 54F]
Capital Gain on Shifting of Industrial Undertaking from Urban Areas to Non-Urban Areas [Section 54G]
 Exemption of Capital Gain on transfer of assets in case of shifting of Industrial Undertaking from an urban area to any Special Economic Zone (SEZ) [Sec. 54GA]
Long term Capital Gain on Transfer of Residential Property if Net Consideration is Invested in the Equity Shares of an Eligible company [Section 54GB] [w.e.f. A.Y. 2013- 14 but upto A.Y. 201 7-1 8]
Reference to Valuation Officer [Section 55] towards Capital Gain
 TREATMENT OF CAPITAL LOSS [Section 74]
TAX ON CAPITAL GAINS

 
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