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
(B) Conditions
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.
(D) Adjustment of Basic Exemption Limit
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.
(G) No benefit of Indexation
A taxpayer who has earned LTCG from transfer of the above assets has two options:
OR
(ii) No indexation, and pay tax at concessional rate @ 10% (plus surcharge and cess) u/s 112A.
Author Bio
Benfit of Indexation is not applicable if 112 A applies as per 3 vrd proviso to sec 48
If 112 A applies then indexation benfit is not available as per proviso to sec 48.
Would LTCG be taxable for the amounts exceeding 1Lac, if the LTCG is, let’s say, approximately, INR3Lac?
i.e., would the tax be on the incremental INR 2Lac?
what if there is a long term capital loss from sale of equity shares