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CA Final · Integrated Business Solutions (Multidisciplinary Case Study with Strategic Management) · Direct Tax Laws & International Taxation

Case: Arjun Pvt Ltd (resident in India) sold unlisted shares of an Indian company held for 30 months for Rs 80,00,000. Cost of acquisition was Rs 30,00,000. Ind AS carries these shares at fair value through other comprehensive income, and the carrying value is Rs 70,00,000 on the date of sale. For income-tax purposes, what is the chargeable capital gain, assuming the Finance (No. 2) Act, 2024 rules (sale after 23 July 2024) and no indexation?

The gain is Rs 50,00,000 long-term, being the sale price minus the original cost. The shares were held beyond 24 months, and the Ind AS fair value carrying amount does not affect the tax computation.

  1. ARs 10,00,000 long-term capital gain
  2. BRs 50,00,000 long-term capital gainCorrect
  3. CRs 50,00,000 short-term capital gain
  4. DRs 40,00,000 long-term capital gain

Explanation

Unlisted shares are long-term if held over 24 months. The gain is sale price less cost = 80,00,000 - 30,00,000 = Rs 50,00,000, taxed at 12.5% without indexation. The Ind AS carrying value is irrelevant for tax, so Rs 10,00,000 is wrong.

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