Skip to content

NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Taxation (NISM XXI-A)

A PMS client's portfolio sold listed equity shares (STT paid) with a long-term capital gain of Rs 1,50,000 in a year, with no other long-term gains on such shares. Assuming the exemption limit of Rs 1,25,000 and a rate of 12.5% (excluding surcharge and cess), what is the tax?

The tax is Rs 3,125. The long-term gain of Rs 1,50,000 is reduced by the Rs 1,25,000 exemption, leaving Rs 25,000, which is taxed at 12.5%. Taxing the full gain would wrongly give Rs 18,750.

  1. ARs 3,125Correct
  2. BRs 18,750
  3. CRs 15,625
  4. DRs 30,000

Explanation

Taxable gain = 1,50,000 - 1,25,000 = Rs 25,000. Tax = 12.5% of 25,000 = Rs 3,125. Rs 18,750 wrongly taxes the whole gain at 12.5%, and Rs 15,625 taxes the exemption amount.

Did you get it right without looking?

One question tells you little. A timed set on Taxation (NISM XXI-A) shows your real accuracy, how long you take and where you lose marks.

Practise Taxation (NISM XXI-A)Free diagnostic mock

More Taxation (NISM XXI-A) questions