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Earlier
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On Sale of shares on a Recognized Stock Exchange

on which Securities Transaction Tax is paid

Long Term Capital Gain was Exempt

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Now
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This exemption has been withdrawn

This Long Term Capital Gain will be taxed at 10%

However benefit of indexation will not be available

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Exception
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No tax payable if Long Term Capital Gain upto 100000 is exempt

Note 1

Sale of Shares upto 31 march 2018 will be still exempt

Note 2

For Sale of Shares from 1 April 2018 Onwards

Cost Price will be

Higher ofValue as on 31 Jan 2018

Cost Price

S.N: | Particualrs | CASE 1 | CASE 2 | CASE 3 | CASE 4 |

A | SALES PRICE | 250 | 250 | 200 | 150 |

B | COST PRICE | 100 | 100 | 200 | 100 |

C | VALUE AS ON 31 JAN 2018 | 200 | 50 | 100 | 200 |

D | COST OF ACQUISITION(HIGHER OF B AND C) | 200 | 100 | 200 | 200 |

E | PROFIT (A-D) | 50 | 150 | 0 | -50 |

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Example 1
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Suppose 1000 shares purchased for Rs 60 each on 1 Jan 2017

They are sold at 80 each on 20 March 2018

Calculate Capital Gain and Tax

View AnswerSince shares are sold after one year,it is Long Term Capital Gain

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Calculation of Long Term Capital Gain
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Particulars | Amt |

Sales Price | 80000 |

Cost of Acquisition | 60000 |

Long Term Capital Gain | 20000 |

Tax | 0 |

Since shares are sold in FY 2017-18,no tax to be paid on same

Long Term Capital gain on sale of shares is exempt

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Example 2
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Suppose 1000 shares purchased for Rs 60 each on 1 Jan 2017

Price as on 31 Jan 2018 was 75

They are sold at 80 each on 20 April 2018

Calculate Capital Gain

View AnswerSince shares are sold after one year,it is Long Term Capital Gain

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Cost of Acquisition will be higher of
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Particulars | Amt |

Purchase Price | 60 |

value of share | 75 |

Cost of Acquisition of 1 share | 75 |

Cost of Acquisition of 1000 share | 75000 |

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Calculation of Long Term Capital Gain
**

Particulars | Amt |

Sales Price | 80000 |

Cost of Acquisition | 75000 |

Long Term Capital Gain | 5000 |

Tax | 0 |

Tax is still 0 as Long Term Capital Gain is less than 100000

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Example 3
**

Suppose 1000 shares purchased for Rs 60 each on 1 Jan 2017

They are sold at 200 each on 20 April 2018

Calculate Capital Gain

Assume Price as on 31 Jan 2018 is 75 per share

View AnswerSince shares are sold after one year,it is Long Term Capital Gain

**
Cost of Acquisition will be higher of
**

Particulars | Amt |

Purchase Price | 60 |

value of share | 75 |

Cost of Acquisition of 1 share | 75 |

Cost of Acquisition of 1000 share | 75000 |

Calculation of Long Term Capital Gain

Particulars | Amt |

Sales Price | 200000 |

Cost of Acquisition | 75000 |

Long Term Capital Gain | 125000 |

Less Exemption for long Term Gain | 100000 |

Balance Long Term Capital Gain | 25000 |

Tax @ 10% | 2500 |

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Example 4
**

Suppose 1000 shares purchased for Rs 60 each on 10 Feb 2018

They are sold at 200 each on 20 March 2019

Calculate Capital Gain

Assume Price as on 31 Jan 2018 is 75 per share

View AnswerSince shares are sold after one year,it is Long Term Capital Gain

Since shares were acquired after 31 Jan 2018,

Cost will be Actual Purchase Price only i.e. 60

(Price as on 31 Jan is not relevant)

Calculation of Long Term Capital Gain

Particulars | Amt |

Sales Price | 200000 |

Cost of Acquisition | 60000 |

Long Term Capital Gain | 140000 |

Less Exemption for long Term Gain | 100000 |

Balance Long Term Capital Gain | 40000 |

Tax @ 10% | 4000 |

Example 5

Suppose 1000 shares purchased for Rs 60 each on 10 Feb 2018

They are sold at 200 each on 11 Jan 2019

Calculate Capital Gain

Assume Price as on 31 Jan 2018 is 75 per share

View AnswerSince shares are sold before one year,it is Short Term Capital Gain

Since shares were acquired after 31 Jan 2018,

Cost will be Actual Purchase Price only i.e. 60

(Price as on 31 Jan is not relevant)

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Calculation of Long Term Capital Gain
**

Particulars | Amt |

Sales Price | 200000 |

Cost of Acquisition | 60000 |

Short Term Capital Gain | 140000 |

Tax @ 15% | 21000 |

Note

No Exemption of 100000 for Short term capital gain

Whole Amount is taxed at 15%