NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Taxation of Equity Products
Meera, a resident individual, sold listed equity shares on a recognised stock exchange after paying STT. She held them for 8 months and made a gain of Rs 80,000. Assume the short-term capital gains rate under section 111A is 20% and no other income or exemption adjustments apply, ignoring surcharge and cess. What is the tax on this gain?
The tax is Rs 16,000. Shares held for 8 months are short-term because the holding is under 12 months, and STT-paid listed equity gains fall under section 111A at the assumed 20% rate. Twenty percent of Rs 80,000 gives Rs 16,000.
- ARs 8,000
- BRs 12,000
- CRs 16,000Correct
- DRs 24,000
Explanation
Holding of 8 months is below 12 months, so the gain is short-term under section 111A. Tax = 20% x 80,000 = Rs 16,000. Rs 8,000 uses 10%, and Rs 24,000 uses 30%.
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