NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Capital Gains
Meera sold listed equity shares of an Indian company on a recognised stock exchange after holding them for 18 months, with STT paid on the sale. Her total long-term capital gain for the year on such shares is Rs 2,25,000, and she has no other LTCG. Assume the LTCG rate on listed equity is 12.5% with an exemption of Rs 1,25,000 per year, and ignore surcharge and cess. What is her tax?
The tax is Rs 12,500. The shares are long-term because they were held over 12 months. After the Rs 1,25,000 exemption, taxable LTCG is Rs 1,00,000, and 12.5% of that gives Rs 12,500, ignoring surcharge and cess.
- ARs 12,500Correct
- BRs 28,125
- CRs 40,625
- DRs 22,500
Explanation
Holding of 18 months exceeds 12 months, so the gain is long-term. Taxable LTCG = 2,25,000 - 1,25,000 = 1,00,000. Tax = 12.5% x 1,00,000 = Rs 12,500. Rs 28,125 taxes the full gain without the exemption.
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