L t c g and how to invest

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This query is : Resolved

Kapil Jain (Querist)

05 August 2011 Dear Friends

i have share of unlisted company from 2004-05
now i want sell.

How to calculate Tax
how to invest in best way to Save tax.

Am i right
if you indexed the cost tax @ 20
if you do't indexed the cost tax @ 10 %

CA. Anoop Gadia

CA. Anoop Gadia (Expert)

05 August 2011 yes you right.

it is LTCG which taxable under income tax in Capital Gain head - other than STT paid security gain.

CA Aditya Goel

CA Aditya Goel (Expert)

06 August 2011 Correct. Its taxable LTCG as shares are of unlisted company and thus not exempt u/s 10.

Kapil Jain

Kapil Jain (Querist)

06 August 2011 Actually share are not listed.

am i right
for long term,36 months of holding is required
the rule of without indexing and tax rate 10% is not applicable for unlisted company share.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

07 August 2011 If you are right, when share are not listed then you are wrong in saying that the period required for such shares to be a LT capital asset is 36 months. Only 12 months Holding Period is required for treating the same as LTCA. And here I am absolutely right.
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But it doesn't matter as these are acquired in 2004-05 and by any criteria
these are LTCA.
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And you are absolutely right in asserting that "the rule of without indexing and tax rate 10% is not applicable for unlisted company share." ..
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Now you can exercise the right to indexation of Cost of LTCA and can calculate capital Gains.
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You can rightly get exemption U/s 54F by investing
the sales consideration in Residential House as well as U/s 54EC by investing the capital Gains in Capital Gain Bonds of NHAI etc within the prescribed time limit.

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