Short Term and Long Term: by - Chaksh Sharma

Short term and Long term
By - Chaksh Sharma
Capital Gain
 Any profits or gains arising from transfer of a capital
asset effected in previous year shall be chargeable to
income tax under the head “capital gains”
1. Income arise from transfer of asset
2. In previous year
By - Chaksh Sharma
Capital Asset
1. Property of any kind
2. Any security held by a Foreign Institutional Investor
(FII) which has invested in such security in
accordance to regulations of SEBI
By - Chaksh Sharma
Capital Assets - Types
 Short term
 Held by assessee for not more than 24 months
immediately preceding the date of transfer
 In case of shares ( equity or preference) listed in any
recognised stock exchange, period is 12 months
 Long term
 Held by assessee for more than 24 months immediately
preceding the date of transfer
 In case of shares ( equity or preference) listed in any
recognised stock exchange, period is more than 12
months
By - Chaksh Sharma
Calculation
 Short term capital gain (STCG)
Particulars Amount Amount

Full value of consideration ....
Less : expenses on transfer ....
Net consideration .......
Less: cost of acquisition ....
Less: cost of improvement .... .......
Short term capital gain .......
By - Chaksh Sharma
Calculation
 Long term capital gain (LTCG)
Particulars Amount Amount

Full value of consideration ....
Less : expenses on transfer ....
Net consideration .......
Less: indexed cost of acquisition ....
Less: indexed cost of improvement .... .......
Long term capital gain .......
By - Chaksh Sharma
Cost Inflation Index
By - Chaksh Sharma
By - Chaksh Sharma
Period of holding
 Starts from day asset is acquired and ends the day it is
sold or transferred
 But can be different in following:
 Shares held in a company in liquidation
 Capital asset acquired by gift, will, succession etc
 Shares in Indian amalgamated company
 Shares acquired in Indian resulting company
 Sweat equity shares
By - Chaksh Sharma
Cost of acquisition
a) Assets acquired without paying any price
 Cost at which it is acquired by previous owner plus (+)
cost of improvement less (-) depreciation
b) Shares of amalgamated company
 Cost of amalgamated company
c) Depreciating assets
 Calculate STC gain or loss
d) Advance money
 To be adjusted out of cost of acquisition
By - Chaksh Sharma
Cost of acquisition
e) Cost is unascertainable
 FMV on date of acquisition
f) Option of FMV on 1-4-81 (Now 2001)
 It will be cost of acquisition for all purposes
g) Cost of shares
 Cost of acquisition will be the cost at which original
shares were acquired
h) Cost of bonus shares and on renunciation of right
shares
 W.e.f. 1-4-95 it is to be taken as Nil
 From 1st April , 2017 FMV on 1-4-2011 is to be
considered
By - Chaksh Sharma
Exempted capital gains
1. Income from sale of shares in certain cases
 Long term capital asset ( more than 12 months)
 Not after 1-1-2017
2. Any income from long term capital asset being self
cultivated urban agricultural land on compulsory
acquisition
3. Long term capital gain on transfer of securities covered
under Securities Transaction Tax ( not after 1-1-2017)
4. Income from transfer of asset of an undertaking engaged
in business of generation, transmission or distribution of
power
By - Chaksh Sharma
5. Sale of residential house property ( asset is long term) if
invested in -
i. Purchase of another house within one year before or two
years after the sale
ii. Construction of another house within 3 years after the sale
6. Sale of self cultivated agricultural land
 If reinvested in purchase of another land within 2 years of
sale
7. Compulsory acquisition of capital assets used for 2 years
 If reinvested in purchase of another land or building within
3 years of sale. New asset can not be sold for 3 years
By - Chaksh Sharma
8. Gain from bonds issued by NHAI or NRECL should
be reinvested within 6 months
9. Sale of any long term capital asset
 Purchase of another house within one year before or
two years after the sale
10. Transfer of assets due to shifting of factory from
urban to non urban areas
 Purchase of machinery, land or building within one
year before or two years after the sale
By - Chaksh Sharma
11. Transfer of assets of an industrial undertaking due to
shifting of factory from urban area to SEZ
12. Long term gain on transfer of a residential property
if net consideration is invested in the equity shares of
an eligible company w.e.f. AY 2013-14 upto AY 2017-18
By - Chaksh Sharma
Treatment of capital loss
 Set off
 STCL can be set off from STCG or LTCG
 LTCL can be set off from LTCG
 Carry forward
 For 8 succeeding previous years
By - Chaksh Sharma
Tax on capital gains
a) Total income shall be divided in 3 parts
i. STCG on shares (subject to STT)
ii. LTCG on all assets except on shares
iii. Balance total income
b) On STCG on shares (subject to STT) – 15%
c) LTCG on all assets except on shares – 20% with
indexation or 10% without indexation (10% of shares
when capital gain is more than Rs. 1 Lakh)
d) On balance total income at scheduled rates
e) In case balance total income is less than exemption limit
of ₹250000 then the difference shall be adjusted from
LTCG if its not there then STCG and balance capital gain
will be taxed at prescribed rates
By - Chaksh Sharma

Short Term and Long Term: by - Chaksh Sharma

Uploaded by

Copyright:

Available Formats

Short Term and Long Term: by - Chaksh Sharma

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Short Term and Long Term: by - Chaksh Sharma

Uploaded by

Copyright:

Available Formats

Short term and Long term

Particulars Amount Amount

Particulars Amount Amount

You might also like

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.