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CA Intermediate · Taxation · Capital Gains

Anita, a resident individual, bought listed equity shares for ₹4,00,000 on 1 April 2024. She sold them through a recognised stock exchange on 20 December 2026 for ₹5,90,000, paying STT on both transactions and brokerage of ₹10,000 on the sale. She has no other capital gains in tax year 2026-27. What is her long-term capital gain chargeable to tax after the available exemption limit?

The taxable long-term capital gain is ₹55,000. The shares were held over 12 months, so the gain is 5,90,000 less brokerage 10,000 less cost 4,00,000, which is ₹1,80,000. After the ₹1,25,000 exemption limit for listed equity with STT, ₹55,000 remains.

  1. A₹55,000Correct
  2. B₹65,000
  3. C₹1,80,000
  4. D₹6,875

Explanation

Holding exceeds 12 months, so the gain is long-term. Gain = 5,90,000 − 10,000 − 4,00,000 = ₹1,80,000. Long-term gain on listed equity with STT is exempt up to ₹1,25,000, so the taxable amount is 1,80,000 − 1,25,000 = ₹55,000. Option B ignores the transfer expense, and ₹6,875 is the tax at 12.5%, not the gain.

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