Earlier
On Sale of shares on a Recognized Stock Exchange
on which Securities Transaction Tax is paid
Long Term Capital Gain was Exempt
Now
This exemption has been withdrawn
This Long Term Capital Gain will be taxed at 10%
However benefit of indexation will not be available
Exception
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 of
Value 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 |
Example 1
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 answer
Since shares are sold after one year,it is Long Term Capital Gain
Calculation of Long Term Capital Gain
| 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
Example 2
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 answer
Since 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 | 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
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 answer
Since 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 |
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 answer
Since 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 answer
Since 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)
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%