NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Taxation
Under the rules in force from 23 July 2024, an investor sells units of an equity-oriented fund after holding them 18 months, realising a long-term capital gain of Rs 2,00,000 with no other LTCG in the year. Assuming a Rs 1,25,000 exemption limit and 12.5% rate (ignoring cess), what is the tax?
The tax is Rs 9,375. The holding is long-term, so Rs 1,25,000 of the Rs 2,00,000 gain is exempt, leaving Rs 75,000 taxed at 12.5%. Taxing the whole gain or the exempt amount gives the wrong figures.
- ARs 9,375Correct
- BRs 15,625
- CRs 25,000
- DRs 40,000
Explanation
Equity holding over 12 months is long-term. Taxable gain = 2,00,000 - 1,25,000 = 75,000. Tax = 12.5% x 75,000 = Rs 9,375. Rs 25,000 taxes the full gain at 12.5%; Rs 15,625 taxes only the exemption amount.
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 current rules, how are capital gains on units of a specified mutual fund (debt fund investing not more than 35% in domestic equity) pu…
- A resident investor redeems equity-oriented fund units held for 10 months and earns a short-term capital gain of ₹80,000. Assuming a short-t…
- Which of the following is treated as an equity-oriented fund for tax purposes in India?
- Securities Transaction Tax (STT) on redemption of units of an equity-oriented mutual fund is paid by whom?
- A resident individual redeems units of an equity-oriented mutual fund after holding them for 8 months, realising a gain of Rs 40,000. Applyi…
- A resident investor in a mutual fund receives IDCW of Rs 40,000 during the year from a domestic equity scheme. Under current TDS rules, what…