Tax on earnings via demat account
This query is : Resolved
Divya Priya
(Querist)
07 February 2017
How should I pay tax on earnings via demat account?what is the rate of tax ?Explain me clearly.
CA DHAVAL MISTRY
(Expert)
08 February 2017
Purchase and Sale of equity shares are capital asset unless you are involved in the business or share trading.
Types of capital gain
(a) Short Term Capital Gain
In case the shares which were sold were acquired within 1 year from the date of sale, there will be a sort term capital gain. The short term capital gain is taxed at 15% under section 111A of income tax act if the shares sold is liable to Securities Transaction Tax (STT). You can check in your sale bill if STT is levied or not. If the shares sold are not liable for STT, than normal tax slab to be applied for calculation of tax.
(b) Long Term Capital Gain
Any shares sold during the year if they were purchased before 1 year from the date of sale, and the securities are listed on stock exchange, than the Long Term Capital Gain is exempt from tax. If the shares sold are unlisted then there will be 20% tax on gain. As your question mention that you want to know taxation of demat account, it is presumed that every shares are listed on stock exchange.
Thanks
Types of capital gain
(a) Short Term Capital Gain
In case the shares which were sold were acquired within 1 year from the date of sale, there will be a sort term capital gain. The short term capital gain is taxed at 15% under section 111A of income tax act if the shares sold is liable to Securities Transaction Tax (STT). You can check in your sale bill if STT is levied or not. If the shares sold are not liable for STT, than normal tax slab to be applied for calculation of tax.
(b) Long Term Capital Gain
Any shares sold during the year if they were purchased before 1 year from the date of sale, and the securities are listed on stock exchange, than the Long Term Capital Gain is exempt from tax. If the shares sold are unlisted then there will be 20% tax on gain. As your question mention that you want to know taxation of demat account, it is presumed that every shares are listed on stock exchange.
Thanks
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