Capital Gains Tax

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Harish Naidu (Querist)
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18 January 2011 Hi, I am a Director in a Private Limited Company in Hyderabad.

I had acquired shares on 31.3.2009
No of shares - 3950
Share Value - 10
Share Premium - 6.5
Total Per Share Value - 16.50
Total Purchase Value - Rs. 65,175.00

Sold Shares on 01.11.2010
No of Shares - 3950
Share Value - 360
Cost of Sale - Rs. 14,22,000/-

Please help me out with the calculation of Capital Gains Tax on this transaction

CA Vijay Kumar Gupta

CA Vijay Kumar Gupta (Expert)
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18 January 2011 You have earned short term capital gains of Rs.13,56,825.00 which should be reflected under the head capital gains.Assuming that the shares which were sold by you are listed and you had paid stt on sale of shares, you are liable to pay tax at the half rate of your normal tax depending upon your income. Otherwise you have to pay normal rate of tax.Dont forget to pay advance tax.

Harish Naidu

Harish Naidu (Querist)
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18 January 2011 Sir, Please let me know whether it would be longterm capital gain as Shares have been held more 12 months. Its a private limited company and not listed. so I am thinking to pay tax @ 20% of gain value. Also I have income of Rs.24,00,000 PA as Directors Remuneration, Inocme Tax has been paid on this income according to the tax slabs. My query is whether I should add Capital Gains income to my total Income and pay tax @ 30% or I need to consider capital gains income as seperate and pay tax @ 20%. Please help me out

CA Vijay Kumar Gupta

CA Vijay Kumar Gupta (Expert)
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18 January 2011 yes , you are right. I had misunderstood the purchase date as 31-03-2010 instead of 31-03-2009.Sorry for the inconveinance. Now, it is LTCG and you have to pay 20% tax .first calculate LTCG on indexed cost and reflect it as LTCG in the return . No you have to pay tax @20% flat.

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