NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Capital Gains
Ms. Kavita Menon, a resident individual, sold listed equity shares on a recognised stock exchange (STT paid) after holding them for 3 years. Her total long-term capital gain in the year from such shares is ₹3,25,000, and she has no other such gains. Ignoring surcharge and cess, and assuming the current provisions (12.5% rate with a ₹1,25,000 annual exemption limit), what is her tax on this gain?
The tax is ₹25,000. The long-term gain of ₹3,25,000 on STT-paid listed equity is first reduced by the ₹1,25,000 limit, leaving ₹2,00,000, which is taxed at 12.5%. Cess and surcharge are ignored as per the question.
- A₹40,625
- B₹25,000Correct
- C₹20,000
- D₹40,000
Explanation
Taxable gain = 3,25,000 - 1,25,000 = ₹2,00,000. Tax at 12.5% = ₹25,000. Using the full 3,25,000 gives ₹40,625, which ignores the exemption limit. Applying 20% to 2,00,000 gives ₹40,000, which wrongly uses the short-term rate.
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