NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Taxation
Mr. Kapoor realised long-term capital gains of Rs 1,75,000 on equity-oriented fund units in a financial year and has no other capital gains. Assuming the exemption of Rs 1,25,000 and a 12.5% rate, what is the tax before surcharge and cess?
Long-term gains on equity-oriented funds are exempt up to Rs 1,25,000 a year and the balance is taxed at 12.5%. Rs 1,75,000 less Rs 1,25,000 leaves Rs 50,000, so tax is Rs 6,250 before surcharge and cess.
- ARs 6,250Correct
- BRs 21,875
- CRs 8,750
- DRs 15,625
Explanation
Taxable LTCG = 1,75,000 − 1,25,000 = Rs 50,000. Tax at 12.5% = Rs 6,250. Rs 21,875 results from taxing the whole gain, ignoring the exemption. Rs 8,750 uses 20% wrongly on the remainder, and 15,625 applies 12.5% to 1,25,000.
Did you get it right without looking?
One question tells you little. A timed set on Taxation shows your real accuracy, how long you take and where you lose marks.
More Taxation questions
- Under the Income-tax Act, dividend (IDCW) received by a resident individual investor from a mutual fund scheme is taxed in the investor's ha…
- For a resident individual investor, which of the following correctly describes how dividends (IDCW) received from a mutual fund scheme are t…
- An investor realises a long-term capital gain of ₹2,25,000 on equity-oriented fund units in a financial year, with no other long-term gains.…
- Which of the following investments gives a deduction under Section 80C of the Income-tax Act for a mutual fund investor, subject to the over…
- Ravi redeems units of an equity-oriented mutual fund scheme after holding them for 8 months and makes a gain. How is this gain classified fo…
- Ms. Kavita redeems units of an equity-oriented mutual fund held for 18 months and earns a long-term capital gain of Rs 1,60,000 in the finan…