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Tax on Sale of Listed Equity Shares as per unit Budget 2018

Let’s understand the tax ability of listed equity shares with a flow chart (assuming STT has been paid on purchase & sale of shares in a recognized stock exchange)

P Mehta & Jain

TAX ABILITY OF LISTED EQUITY SHARES 

(As Proposed in Finance Bill, 2018)

Let’s understand the tax ability of listed equity shares with a flow chart (assuming STT has been paid on purchase & sale of shares in a recognized stock exchange)

COA = Cost of Acquisition

FMV = Fair Market Value (Highest price on 31st Jan, 2018, otherwise immediately preceding date Traded price)

LTCG = Long term capital Gain

STCG = Short term capital Gain

LES = Listed Equity Shares

Then COA will be Actual Sales price or Actual Purchase price whichever is higher.

Long term Capital gain will be Actual Sales price Less (‐) Cost of acquisition as per above flow chart. Tax @10% in excess of Rs. 1 Lakh in addition to Security Transaction Tax (STT) will be charge on LTCG. However all accrued gains till 31st January, 2018 are exempt practically as per above flow chart.

(The author can be reached at capmjco@gmail.com)

Categories: Income Tax

View Comments (1)

  • Nice to read the article, thanks. However, it would have been better if the same can be explained with example of any script.

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