SEC 112A- LTCG ON SALE OF CERTAIN ASSETS (Inserted by Finance Act 2018, w.e.f. 01.04.2019)
Concessional rate of tax on transfer of Certain assets:
(A) The above section 112A is applicable on the following circumstances
(a) Long term capital gain arising from transfer of the following assets
(i) an equity share in a company
(ii) a unit of an equity oriented fund or
(iii) a unit of a business trust
(b) Concessional Rate of Tax – 10%
(c) Long Term Capital Gain > Rs. 1,00,000
STT should be paid on (i) acquisition and transfer of an equity share of a company, or
(ii) transfer an unit of an equity oriented fund or unit of business trust.
(C) The COA of a listed equity share acquired by the taxpayer before February 1, 2018, shall be deemed to be the HIGHER of following:
a) The actual cost of acquisition (COA) of such asset; or
b) Lower of following:
(i) Fair market value (FMV) of such shares as on January 31, 2018; or
(ii) Actual Full Value consideration (FVC) accruing on its transfer.
Further if the FVC < FMV, then the COA will be higher of FVC or Actual Cost.
Only a resident individual/HUF can adjust the exemption limit against LTCG after making adjustment of other Income. Thus, a non-resident individual and non-resident HUF cannot adjust the exemption limit against LTCG.
A taxpayer who has earned LTCG from transfer of the above assets has two options:
(ii) No indexation, and pay tax at concessional rate @ 10% (plus surcharge and cess) u/s 112A.