Profit on sale of shares
This query is : Resolved
27 September 2011
Mr.X purchased 2700 shares @ Rs.100 each amounts to Rs. 2,70,000 from an unlisted private company on oct 2009, and the same was allotted in oct 2009. The above shares were sold by him to a listed public company in Dec 2010 at an amount of Rs.14,00,000.This Rs.14,00,000 is invested in shares of another private limited company. Does the profit received on the above sale of 2700 shares taxable? If taxable, under what head of income it is taxable and at what rate?
27 September 2011
Yes this sale of shares is taxable under the head capital gains.
Since the shares have been held for a period of more than 12 months, long term capital gain will arise.
Benefit of indexation will be available.
STT would not have been paid. The gain will be taxed @ 20%.
Since the shares have been held for a period of more than 12 months, long term capital gain will arise.
Benefit of indexation will be available.
STT would not have been paid. The gain will be taxed @ 20%.
27 September 2011
thanks yaar.......
could u please tell me the section under which it is taxable?
could u please tell me the section under which it is taxable?
28 September 2011
Section 2(14) - Shares are capital assets.
Section 2(47) - Sale of shares is transfer.
Section 45 - Transfer of capital assets will attract capital gain.
Section 2(29A) & Section 2(42A) - Shares held for more than 12 months are long term capital assets.
Section 112 - Tax on long term capital gain.
Section 2(47) - Sale of shares is transfer.
Section 45 - Transfer of capital assets will attract capital gain.
Section 2(29A) & Section 2(42A) - Shares held for more than 12 months are long term capital assets.
Section 112 - Tax on long term capital gain.
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