Shares,Debanture TAX Benefit ?
This query is : Resolved
21 September 2009
Dear Sir,
Can anybody take tax benefits of Shares,Debeture ? if Yes In which Sec ?
Thanks in Advance
Can anybody take tax benefits of Shares,Debeture ? if Yes In which Sec ?
Thanks in Advance
20 November 2009
Dear Sir,
Can anybody take tax benefits of Shares,Debeture ? if Yes In which Sec ?
Thanks in Advance
Can anybody take tax benefits of Shares,Debeture ? if Yes In which Sec ?
Thanks in Advance
25 July 2025
Yes, shares and debentures can offer tax benefits under various sections of the Income Tax Act, 1961 in India — depending on the type of income, investment, and holding period.
✅ Tax Benefits Related to Shares & Debentures
🔹 1. Capital Gains – Section 10(38) (now withdrawn), Section 112A, 111A
Equity Shares (listed) and Equity Mutual Funds
Long-Term Capital Gains (LTCG): Held for > 12 months
Taxed @ 10% under Section 112A if gain exceeds ₹1 lakh/year (No indexation)
Short-Term Capital Gains (STCG): Held ≤ 12 months
Taxed @ 15% under Section 111A
Debentures
LTCG: Held > 36 months — Taxed @ 20% with indexation (Sec 112)
STCG: Held ≤ 36 months — Taxed as per slab rate
📌 Prior to AY 2019-20, LTCG on shares was fully exempt under Sec 10(38), but now it is taxable.
🔹 2. Dividend Income – Section 56 & Section 115BBDA (now withdrawn)
Dividend from Shares/Debentures is taxable under "Income from Other Sources"
Since AY 2021–22: Taxed at applicable slab rates
No more Dividend Distribution Tax (DDT) for companies
TDS applies if dividend exceeds ₹5,000/year from a company
🔹 3. Section 80C – Tax Saving Bonds & Debentures (Selective)
While regular shares and debentures are not eligible under Section 80C, certain specific investments are:
Infrastructure Bonds (e.g., from NHAI, REC) – Earlier eligible under Sec 80CCF (now discontinued)
Tax-saving mutual funds (ELSS) – Eligible under Section 80C (limit ₹1.5 lakh)
🔹 4. Section 54EC – Capital Gains Exemption on Sale of Property
If you sell real estate and reinvest the capital gains in specified bonds (NHAI/REC), you can claim exemption:
Max investment: ₹50 lakh
Lock-in: 5 years
Applies to capital gains from property, not shares directly
🔹 5. Set-off & Carry Forward of Losses – Sections 70, 71, 74
Short-term capital loss can be set off against any capital gains
Long-term capital loss can only be set off against LTCG
Unused losses can be carried forward for 8 assessment years
✅ Tax Benefits Related to Shares & Debentures
🔹 1. Capital Gains – Section 10(38) (now withdrawn), Section 112A, 111A
Equity Shares (listed) and Equity Mutual Funds
Long-Term Capital Gains (LTCG): Held for > 12 months
Taxed @ 10% under Section 112A if gain exceeds ₹1 lakh/year (No indexation)
Short-Term Capital Gains (STCG): Held ≤ 12 months
Taxed @ 15% under Section 111A
Debentures
LTCG: Held > 36 months — Taxed @ 20% with indexation (Sec 112)
STCG: Held ≤ 36 months — Taxed as per slab rate
📌 Prior to AY 2019-20, LTCG on shares was fully exempt under Sec 10(38), but now it is taxable.
🔹 2. Dividend Income – Section 56 & Section 115BBDA (now withdrawn)
Dividend from Shares/Debentures is taxable under "Income from Other Sources"
Since AY 2021–22: Taxed at applicable slab rates
No more Dividend Distribution Tax (DDT) for companies
TDS applies if dividend exceeds ₹5,000/year from a company
🔹 3. Section 80C – Tax Saving Bonds & Debentures (Selective)
While regular shares and debentures are not eligible under Section 80C, certain specific investments are:
Infrastructure Bonds (e.g., from NHAI, REC) – Earlier eligible under Sec 80CCF (now discontinued)
Tax-saving mutual funds (ELSS) – Eligible under Section 80C (limit ₹1.5 lakh)
🔹 4. Section 54EC – Capital Gains Exemption on Sale of Property
If you sell real estate and reinvest the capital gains in specified bonds (NHAI/REC), you can claim exemption:
Max investment: ₹50 lakh
Lock-in: 5 years
Applies to capital gains from property, not shares directly
🔹 5. Set-off & Carry Forward of Losses – Sections 70, 71, 74
Short-term capital loss can be set off against any capital gains
Long-term capital loss can only be set off against LTCG
Unused losses can be carried forward for 8 assessment years
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Refund Annexure-B
- Liable to deduct tds and 44ADA
- Sale of Equity shares for Purchase of Residential Property
- Nomination of Bank for refund in itr 2
- Section 56(2) of the Income tax Act 1961 , Gift to relative .
- ECO SUPPLY REPORTIONG IN GSTR-1
- Is Interest applicable for payment made through credit ledger vide DRC03 for FY 2020-21 & 2021-22
- CCFS 2026 Schemed
- Subscription paid to foreign customer
- Two seprate Invoice needed
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
