NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Taxation of Equity Products
Caselet: Mr. Sanjay Mehta, a resident individual, has these transactions in a year, all in listed equity shares with STT paid: long-term gain of ₹2,10,000; short-term capital loss of ₹40,000; no other capital transactions. He wants to know his tax using 12.5% on long-term gains above ₹1,25,000 exemption (ignore cess and surcharge). What is the tax payable?
The tax is ₹5,625. The short-term loss of ₹40,000 is set off against the ₹2,10,000 long-term gain, leaving ₹1,70,000. After the ₹1,25,000 exemption, ₹45,000 is taxed at 12.5%, giving ₹5,625.
- A₹5,625Correct
- B₹10,625
- C₹0
- D₹2,500
Explanation
A short-term capital loss can be set off against long-term gains. Net long-term gain = 2,10,000 - 40,000 = 1,70,000. Less exemption 1,25,000 = 45,000. Tax at 12.5% = ₹5,625. ₹10,625 ignores the loss: 85,000 x 12.5%.
Did you get it right without looking?
One question tells you little. A timed set on Taxation of Equity Products shows your real accuracy, how long you take and where you lose marks.
More Taxation of Equity Products questions
- Mr. Arvind Rao, a resident individual, sold listed equity shares on a recognised stock exchange after paying STT on both purchase and sale. …
- Mr. Sunil Verma, a resident individual, receives a dividend of Rs 40,000 from an Indian listed company. Under the current provisions, how is…
- Caselet: Mrs. Radha Iyer holds shares in a listed company that she bought on 15 January 2018 for ₹100 each. The highest price on 31 January …
- Mr. Raman Iyer sold listed equity shares through a stock exchange after holding them for 8 months and made a gain of Rs 1,20,000. Assuming t…
- Under the Income-tax Act as taught for NISM X-B, which of the following transactions in listed equity shares attracts Securities Transaction…
- Ms. Kavita Rao, a resident individual, has the following capital gains in a year on listed equity shares with STT paid: short-term capital l…