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

Caselet: Ms. Anita Desai, a resident individual, sold listed equity shares on a recognised stock exchange after holding them for 18 months, with STT paid. The long-term capital gain was Rs 1,75,000, and she has no other capital gains in the year. Assume long-term capital gains on listed equity are taxed at 12.5% on gains above Rs 1,25,000, ignoring surcharge and cess. What is the tax payable?

The tax payable is Rs 6,250. The exemption of Rs 1,25,000 is deducted from the long-term gain of Rs 1,75,000, leaving Rs 50,000, which is taxed at 12.5%, ignoring surcharge and cess.

  1. ARs 21,875
  2. BRs 6,250Correct
  3. CRs 35,000
  4. DRs 8,750

Explanation

Taxable gain = 1,75,000 - 1,25,000 = Rs 50,000. Tax = 12.5% x 50,000 = Rs 6,250. Rs 21,875 taxes the full gain at 12.5%. Rs 35,000 uses 20% on the excess of the full gain over nothing. Rs 8,750 uses 10% on the full gain minus nothing incorrectly.

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