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

Kavita, a resident individual in the 30% slab (ignore surcharge and cess), sells unlisted shares of an Indian company held for 30 months. Sale value is Rs 12 lakh and cost is Rs 7 lakh, with no transfer expenses. Assuming the long-term capital gains tax rate on such assets is 12.5% without indexation, and she has no other exemption, what is the tax payable on this gain?

The long-term gain is Rs 5 lakh, since unlisted shares held beyond 24 months are long-term. Taxed at 12.5% without indexation, the tax is Rs 62,500, before surcharge and cess.

  1. ARs 62,500Correct
  2. BRs 1,50,000
  3. CRs 75,000
  4. DRs 60,000

Explanation

Gain = 12,00,000 - 7,00,000 = Rs 5,00,000. Held over 24 months, so it is long-term for unlisted shares. Tax = 12.5% of 5,00,000 = Rs 62,500. Using 30% gives Rs 1,50,000, which wrongly applies slab rates.

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