Financial Daily from THE HINDU group of publications
Sunday, Jan 22, 2006
Financial Daily from THE HINDU group of publications Sunday, Jan 22, 2006 |
|
|
|
|
|
|
|
Investment World
-
Taxation Columns - Tax Talk How is capital gain taxed? T. Banusekar
I HAVE earned capital gains from sale of shares in the financial year 2004-05. How is the capital gain to be taxed? Ravi Singh Reply If the gain is long term and if securities transaction tax has been paid at the time of sale of the shares, such gain will be exempt. If securities transaction tax has not been suffered at the time of sale of the shares, which are long term assets, the gain will be charged to tax in accordance with Section 112 of the Act. Under this section tax has to be charged on the capital gain computed with the benefit of indexation at 20 per cent. In such a case, if 10 per cent of the gain computed without the benefit of indexation is lower than 20 per cent of the gain computed with the benefit of indexation, the excess over 10 per cent of the gain computed without the benefit of indexation will be ignored in computing the tax liability. If the gain is short term and if securities transaction tax has been paid at the time of sale of such shares, the gain will be taxed in accordance with Section 111A at 10 per cent of the gain. If the gain is short term and if securities transaction tax has not been paid at the time of sale of shares the gain will be taxed in accordance with the normal provisions at the slab rates applicable to you. You may note that a share is treated as a long-term capital asset if it is held for a period exceeding 12 months and is treated as a short-term capital asset if it is held for 12 months or less. You may also note that securities transaction tax is payable on sale of shares on or after January 1,2004 through a recognised stock exchange.
More Stories on : Taxation | Tax Talk
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2006, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|