Capital Gains on Sale of Shares

Dear Deepak,

It will be classified as STGC, simply because law has used "YEAR" & NOT 365 Days...

Therefore in this case Year is completed on 28th Feb 2009, Remember to calculate Period Of Holding, Date of Sale is not considered...

Hence For Shares to become LTCg period of Holding should EXCEED 1 Year.

Mr.Amir

why it should not be treated as LTCA??? I'm confused.....please clarify.... with case laws or  Income tax Act...

I thought date of sale should be taken for calculating the period of holding....

Regards

Balaji C

Dear Balaji,

Sec 2(42A) defines Short Term Capital Asset which says that in case of shares they should not be held for maore than 12 months..

It is well settled principle that for calculating period of holding the date of transfer of asset is to be excluded, u can refer text books for that...

Mr.Amir

thanx for reply....

sec 2 (42A) explains clearly....

can u tell me the indexation  is optional in case of sale of shares, bt is it optional in case of sale of property or not

Dear Neha

If the shares or units are not sold through recognized stock exchange or if such sale has not suffered STT, then LTCG is taxed at 20% with indexation or 10% without indexation at the option of the assessee... STCG is taxed at normal rates.....

LTCG on sale of shares through recognised stock exchange and has suffered STT - exempt

why you don't want to avail the indexation benefit ?? it will bring down the Gain????

Neha

Indexation benifit is with Long term assets and not short term...........

and as C.balaji said .. long term gain of shares on which STT paid are exempt.......... 

 Ya i don understand why you wanna make it optional..its disadvantageous for the assessee..

Originally posted by : NEHA
	can u tell me the indexation  is optional in case of sale of shares, bt is it optional in case of sale of property or not

No neha! it is not optional in case of sale of property.

this option is available in case of sale of share or units only. in case of LTCG on other assets it is mandatory to index the cost.