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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Taxation of Other Products

Caselet: Mr. Rao, a resident, sold unlisted shares of a private company on 10 January 2025 for Rs 18,00,000. He had bought them 3 years earlier for Rs 12,00,000. He has no other capital gains. Assuming long-term gain on unlisted shares is taxed at 12.5% without indexation, and ignoring surcharge and cess, how much tax is payable, and is the Rs 1.25 lakh exemption available?

Tax is Rs 75,000: the long-term gain of Rs 6,00,000 is taxed at 12.5% without indexation. The Rs 1.25 lakh exemption applies only to listed equity gains under section 112A, so it is unavailable for unlisted shares.

  1. ARs 75,000, since the Rs 1.25 lakh exemption is available only to listed equityCorrect
  2. BRs 60,000, since gain of Rs 6,00,000 is taxed at 10%
  3. CRs 2,25,000, taxed at 12.5% on sale value
  4. DRs 1,50,000, taxed at 25% on the gain

Explanation

Unlisted shares held over 24 months are long-term. Gain = 6,00,000; 12.5% = Rs 75,000. The Rs 1.25 lakh exemption applies only to listed equity gains taxed under section 112A, so no exemption here. Other options use wrong rate or base.

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