Long term capital gains tax from the sale of equity shares or units of equity oriented mutual funds which are subject to securities transaction tax (STT) is totally exempt u/s 10(38),
Short-term capital gain arising from such equity shares or units, which are subject to securities transaction tax (STT) shall be taxes at concessional rate of 15% u/s 111A w.e.f. A.Y. 2009-10
The rate was 10% for such STCHG during 1.10.2001 to 31.03-.2008 in some conditions.
Short term capital gains other then the gains mentioned above is taxed at the normal rates, whereas the long term capital gain is taxed w.e.f. asst. year 1995-96 as per section 112 as under –
Capital Gains Tax Rates
| Assesse Class | Asst Yrs 1997-98 & Onwards Rates |
| Individual and HUF – Resident and Non Resident | 20% |
| Venture capital company on transfer of equity shares of venture capital undertaking | 20% |
| Company
Domestic Foreign company |
20 |
| Offshore funds covered by section 115AB, 115AC or 115AD | 10% |
| Any other (Firm, AOP, BOI etc.) Resident and non resident | 20% |
Note: Surcharge/ education-cess as may be applicable
For individuals and HUFs as the tax shall be charged on that amount of long term capital gain (which is not exempt), which exceeds the maximum amount on which no tax is charged, including the other income.
For example, if an individual has income from interest on loan Rs. 10,000 and has long term capital gains tax (taxable) Rs. 1,80,000 for asst. year 2010-11, he has to pay income tax on Rs. 30,000 i.e. (Rs. 1,90,000 minus exemption limit Rs. 1,60,000).
In the case of debt-based schemes of any Mutual fund (whether listed or not), and shares sold outside recognizes stock exchange in India. The assessee has the option of paying LTCG @ 10% without indexation (Sale – cost), or 20% with indexation (Sale – Indexed cost), whichever is lower.
See: How to compute capital gains tax
Related posts:
- Capital Gains exemption u/s 54F: Capital Gain on Transfer of Asset, other then a Residential House (Sec. 54F)
- Capital Gain Exemption u/s 54: Capital Gains from Transfer of a Residential House
- What is Capital Gains Tax? Computation of Capital Gains Tax
- Capital Gains Guide: Basic Concepts
- Set off of long term capital loss with indexation against long term capital gains without indexation is allowable
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Whether Short Term capital gain tax is required to be paid even if the total taxable income including short term capital gain is below taxable limit?
STCG normally form the part of income ,so is taxable at rates applicable according to the slabs to which income belong.But if the total income incl STCG is below exemption level then you are not required to pay any STCG tax
I purchased a property on 16.10.2004 on instalment basis. The total cost paid by me was 5,77,137/-. I want to sell this plot for 15,00,000/- in March 2011. I understand that I will be liable to LTCG tax on 8,01,628/- @ 20% (after cost indexation). I would like to know if I invest this money in the construction of the first floor of the house in which I am currently living will I be entitled to Exemption from paying LTCG tax. Plz advice
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