The two method for computing LTCG on Shares with and without indexation is stated in provisio to section 112 of IT Act requires following;
that where the tax payable in respect of any income arising from the transfer of a long-term capital asset, being listed securities 10[or unit] 11[or zero coupon bond], exceeds ten per cent of the amount of capital gains before giving effect to the provisions of the second proviso to section 48, then, such excess shall be ignored for the purpose of computing the tax payable by the assessee.
For the purposes of this sub-section,—
(a) “listed securities” means the securities—
) as defined in clause (h
) of section 213
of the Securities Contracts (Regulation) Act, 1956 (32 of 1956); and
(ii) listed in any recognised stock exchange in India;
) “unit” shall have the meaning assigned to it in clause (b
) of Explanation
to section 115AB
In view of above, transfer of shares of an unlisted company shall not have benifit of the above provisio and shall be taxed @ 20% rate.
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