NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Taxation of Other Products
Caselet: Mrs. Nair sells physical gold jewellery bought 4 years ago for Rs 3,00,000 at Rs 5,00,000. Assume long-term capital gain is taxed at a flat 12.5%, ignoring cess, surcharge and expenses. What is the tax on the gain?
The tax is Rs 25,000. The gold was held for four years, making the gain long-term, and 12.5% of the Rs 2,00,000 gain gives Rs 25,000 under the stated assumption.
- ARs 25,000Correct
- BRs 62,500
- CRs 37,500
- DRs 2,50,000
Explanation
Holding of 4 years exceeds 24 months, so the gain is long-term. Gain = 5,00,000 - 3,00,000 = Rs 2,00,000. Tax at 12.5% = Rs 25,000. Rs 62,500 applies 12.5% to the sale price.
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