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

Caselet: Ms. Kapoor, a resident individual, sold listed equity shares held for 18 months and made a long-term capital gain of Rs 1,60,000 (no other capital gains in the year). Assume long-term gains on listed equity shares (STT paid) are exempt up to Rs 1.25 lakh and taxed at 12.5% on the excess, with 4% cess. What is the tax payable on this gain?

The tax payable is Rs 4,550. The gain above the Rs 1.25 lakh exemption is Rs 35,000, taxed at 12.5% giving Rs 4,375, and 4% cess of Rs 175 is added to reach Rs 4,550.

  1. ARs 4,550Correct
  2. BRs 5,200
  3. CRs 20,800
  4. DRs 0

Explanation

Taxable gain = 1,60,000 - 1,25,000 = Rs 35,000. Tax at 12.5% = Rs 4,375. Adding 4% cess (Rs 175) gives Rs 4,550. Rs 5,200 taxes Rs 40,000, Rs 20,800 taxes the full gain with cess, and Rs 0 ignores the excess over the exemption.

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