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    Question

    Mr. Y sold listed equity shares during the Financial

    Year 2024-25 after holding them for 18 months. The sale consideration amounted to ₹8,00,000, while the cost of acquisition was ₹4,50,000. Securities Transaction Tax (STT) was duly paid at the time of sale. You are required to determine the nature of capital gain, the amount of taxable capital gain, and the applicable tax rate.
    A LTCG of Rs. 3,50,000 taxed @ 20% with indexation Correct Answer Incorrect Answer
    B LTCG of Rs. 3,50,000 exempt fully Correct Answer Incorrect Answer
    C LTCG of ₹2,50,000 taxable @10% u/s 112A Correct Answer Incorrect Answer
    D STCG taxed @ 15% Correct Answer Incorrect Answer
    E Business income Correct Answer Incorrect Answer

    Solution

    Holding period = 18 months → treated as Long-Term Capital Asset (since listed equity shares held >12 months). • LTCG = Sale – Cost = 8,00,000 – 4,50,000 = ₹3,50,000 • As per Sec. 112A, LTCG on listed equity shares (with STT) is exempt up to ₹1,00,000; balance taxable @ 10% (without indexation). • Taxable LTCG = ₹3,50,000 – 1,00,000 = ₹2,50,000 @ 10% = ₹25,000 + cess. Final: LTCG of ₹2,50,000 taxable @10% u/s 112A.

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