Applicability of Section 112 or 112A

Dear Experts,

I have a number of shares purchased through a Portfolio Management Service Company at varying dates from 20 September 2018 to 31 January 2019 and sold off from 1 December 2020 to 15 March 21 in BSE and NSE.

Thus, the shares are held for more than one year qualifying for Long Term Capital Gains. The shares are listed and STT are paid.

Which Section will apply for me – 112 or 112A?

My net capital gain is around Rs. 1.7 lacs; can I get the Rs. 1 lac deduction and only be taxed at 10% for the excess amount of Rs. 0.7 lacs?

Thanks for your valuable advice / guidance.

Ram

Replies (3)
Quick Summary
This discussion clarifies whether Section 112A or Section 112 applies to long-term capital gains from shares purchased via a Portfolio Management Service (PMS). If Securities Transaction Tax (STT) was paid on both purchase and sale, Section 112A applies, allowing for the Rs. 1 lakh exemption and a 10% tax rate on gains exceeding this amount. If STT was not paid on purchase, Section 112 applies, offering a choice between a 10% tax without indexation or 20% with indexation.

1.112A 2. Yes tax on 70000 @ 10%

Hi,

1. Appropriately said, Since Period of Holding is above 12 months, LTCG applies

2. As said , purchases are through PMS Co. kindly check whether STT paid on purchases, If paid, then since STT is paid on sale too, Sec112A applies, therefore you can avail exemption of 1 lakh and pay @ 10% on excess gain

(note 1: Rs.1 lakh limit is per assessee per year for all transactions.)

(note 2: indexation is not available)

3. If on purchase STT is not paid, then sec112 applies, then in such case, Assessee have option to pay @ 10% without indexation (or) 20% with indexation.

Hope it clarify your doubt. 

 

Akshay Agaldiviti

Email us at: akshay.agaldiviti @ gmail.com

Gentlemen, Thanks for the clearcut answers. Regards, Ram

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