Long term capital gain

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This query is : Resolved

SUDHIR VARDHAN (Querist)

30 March 2019 I have been acquiring stocks in small quantities since year 2000 till recent and never sold them . Till now the investment value at Cost is INR.16Lacs and the market value has soared to INR 40Lacs. Please let me know if LTCG will be applied and payable on the sale value in case i intend to sell them now. Will indexation apply on these share acquired many years back. Please let me know how this will work out. Thanks, expecting support and advise.

CMA Sivarama Krishnan TS

CMA Sivarama Krishnan TS (Expert)

04 April 2019 For the shares listed in stock exchanges and held for only 12 months or below it will attract short term capital gains tax. No indexation is applied for short term capital gains. Capital gain: Full sales value minus Brokerage minus purchase price. There is a 15% tax on short-term capital gains
If they are held for more than 12 months, it will come under long term capital gains tax when they are sold. For unlisted shares, it will be long term only if they are sold after 36 months; The purchase price will be inflated artificially to take care of cost of inflation applicable to the tenure of holding. It will be applied as per the following new cost of inflation index (New CII) on the cost of acquisition:

Base year 2001-02=100

FY) (AY) (CII) (FY) (AY) (CII)
2001-02 2002-03 100 2011-12 2012-13 184
2002-03 2003-04 105 2012-13 2013-14 200
2003-04 2004-05 109 2013-14 2014-15 220
2004-05 2005-06 113 2014-15 2015-16 240
2005-06 2006-07 117 2015-16 2016-17 254
2006-07 2007-08 122 2016-17 2017-18 264
2007-08 2008-09 129 2016-17 2017-18 264
2008-09 2009-10 137 2017-18 2018-19 272
2009-10 2010-11 148 2018-19 2019-20 280
2010-11 2011-12 167

The formula to arrive the indexed purchase price of the share is: Cost of purchase multiplied by CII of the year of sale divided by CII of the year of purchase. Capital gain: Full sales value Minus Brokerage Minus indexed purchase price.
At present, a 20% tax is levied on such long-term capital gains after indexation or 10% of. long-term capital gains without indexation whichever is lower and beneficial to the assessee.

SUDHIR VARDHAN

SUDHIR VARDHAN (Querist)

04 April 2019 Sivarama , thanks and appreciate your prompt response, i still have query , all my stocks are listed on the Stock Market and are held more than 12 months , so will it still attract 15% LTCG without indexation. Is GST also applicable on the Tax payable , if yes then what is the net outgo towards Tax. Thanks