NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Taxation
Mr. Iyer sold units of an equity-oriented mutual fund after holding them for 18 months and made a long-term capital gain of Rs 1,45,000 in the financial year, with no other capital gains. Assuming the Rs 1,25,000 annual exemption and a 12.5% rate (excluding surcharge and cess) apply, what is the tax payable on this gain?
The tax is Rs 2,500. Long-term gains on equity-oriented funds above Rs 1,25,000 are taxed at 12.5%. The excess is Rs 20,000, and 12.5% of that equals Rs 2,500, before surcharge and cess.
- ARs 2,500Correct
- BRs 18,125
- CRs 14,500
- DRs 0
Explanation
Taxable gain = 1,45,000 - 1,25,000 = Rs 20,000. Tax at 12.5% = Rs 2,500. Rs 18,125 wrongly applies 12.5% to the full gain, and Rs 14,500 uses 10% on the full gain.
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