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CA Intermediate · Taxation · Capital Gains

Anita, a resident individual, sold listed equity shares on a recognised stock exchange (STT paid on both purchase and sale) in tax year 2026-27 for ₹5,25,000. She had bought them 3 years earlier for ₹3,00,000, and brokerage on the sale was ₹5,000. She has no other capital gains. Ignoring surcharge and cess, her tax on this gain is:

The tax is ₹11,875. The long-term gain is ₹2,20,000 after deducting cost and brokerage. After the ₹1,25,000 exemption limit, ₹95,000 remains taxable at 12.5%. Forgetting the brokerage or the exemption limit gives the wrong figures.

  1. A₹11,875Correct
  2. B₹12,500
  3. C₹19,000
  4. D₹27,500

Explanation

LTCG = 5,25,000 − 5,000 − 3,00,000 = 2,20,000. Deduct the ₹1,25,000 exemption limit, leaving 95,000. Tax at 12.5% = ₹11,875. Ignoring brokerage gives ₹12,500, and taxing the full 2,20,000 gives ₹27,500.

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