01 August 2013
My Client had purchased 6200 shares of Sharp Trading & Finance Ltd on 30.06.2010. At that point, the company wasn't listed & so, the shares alloted were physical. Later, the company got listed & my client converted the physical shares in DEMAT Account. He has sold the shares through stock exchange & paid STT on the same. Is the long term capital gain eligible for exemption u/s 10(38) of income tax ?? Or is it taxable ??
There are four conditions to be satisfied to claim exemption under section 10 (38) of the Income Tax Act ,1961
1) the capital assets should be equity shares or equity oriented mutual funds
2) securities or unit should be long term assets that is should be held for more than 1 year from the date of purchase ( not from date of listing)
3)sale /transfer of such assets should be from recognised stock exchange and SST should have been paid.
4) Such transfer should took place after After april,2004.
hence in your case all four above conditions are satisfied so you are undoubtedly eligible to claim exemption u/s 10 (38). Assuming ur share is equity shares.
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