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

Which of the following is a condition for a transaction in listed equity shares to qualify for concessional capital gains tax rates under sections 111A and 112A?

The concessional rates apply when listed equity shares are transferred on a recognised stock exchange and securities transaction tax is paid, subject to specified exceptions. Holding form, residency status and reinvestment are not the conditions for sections 111A and 112A.

  1. AThe transfer must be through a recognised stock exchange with securities transaction tax paid, subject to specified exceptionsCorrect
  2. BThe shares must be held in physical form
  3. CThe investor must be a non-resident only
  4. DThe gain must be reinvested within six months

Explanation

Concessional rates under sections 111A and 112A apply to listed equity shares, equity-oriented fund units and business trust units where STT is paid on transfer, with limited exceptions. Physical form, residency and reinvestment conditions are not required.

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