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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Taxation of Other Products

Rahul, a resident individual, sold unlisted shares of a private company after holding them for 30 months and made a gain of Rs 4,00,000. Assume the long-term capital gains on such unlisted shares are taxed at a flat 12.5% without indexation, and ignore surcharge and cess. What is the tax on this gain?

The tax is Rs 50,000. Unlisted shares held more than 24 months are long-term, and the gain of Rs 4,00,000 is taxed at the assumed flat 12.5% without indexation. Other figures arise from using 10%, 20% or slab rates incorrectly.

  1. ARs 40,000
  2. BRs 50,000Correct
  3. CRs 80,000
  4. DRs 1,20,000

Explanation

Unlisted shares become long-term after 24 months, so 30 months qualifies. Tax = 4,00,000 x 12.5% = Rs 50,000. Rs 40,000 uses 10% and Rs 80,000 uses 20%. The Rs 1,20,000 option wrongly uses a 30% slab rate.

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