Skip to content

NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Case Studies in Comprehensive Financial Advice

Case: Mr. Gupta, a resident individual under the old tax regime, sold listed equity shares after holding them for 18 months. The sale gave a gain of Rs 3,10,000, and he had no other capital gains in the year. Assume long-term gains on listed equity are taxed at 12.5% above an exemption of Rs 1,25,000 per year, ignoring surcharge and cess. What is his tax on this gain?

The tax is Rs 23,125. The shares were held over 12 months so the gain is long-term; after the Rs 1,25,000 exemption the taxable gain is Rs 1,85,000, and 12.5% of that is Rs 23,125. Taxing the full gain would wrongly give Rs 38,750.

  1. ARs 23,125Correct
  2. BRs 38,750
  3. CRs 15,500
  4. DRs 46,500

Explanation

Holding period of 18 months exceeds 12 months, so the gain is long-term. Taxable gain = 3,10,000 - 1,25,000 = 1,85,000. Tax at 12.5% = Rs 23,125. Rs 38,750 applies 12.5% without the exemption; Rs 15,500 and Rs 46,500 use incorrect rates (5% and 15%) on the full gain.

Did you get it right without looking?

One question tells you little. A timed set on Case Studies in Comprehensive Financial Advice shows your real accuracy, how long you take and where you lose marks.

Practise Case Studies in Comprehensive Financial AdviceFree diagnostic mock

More Case Studies in Comprehensive Financial Advice questions