Capital Gains Tax

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DEBDUTTO MUKHERJEE

Senior Business Analyst

24 Points Posted on 10 October 2007

Dear Friends,

If I invest in Equity market through a DP Account, and have Capital Gains in short-term, will I be liable to Short Term Capital Gains Tax if the Capital Gain remains in the DP Account which I ultilise to invest in more shares without transfering the Gain into the Bank Account.

Looking forward for some insight into this matter.

Thanks

Deb

Replies (5)

sajiri shah

CA Final

70 Points Posted on 11 October 2007

hi.. i ve been trading since 5 years n according to me u will have to pay the STCG tax even if u re-invest the same..

ravi sankar

Chartered Accountant

101 Points Posted on 14 October 2007

Dear The condition for exemption is 1) investment in Equities and "not" in DP account 2) CG should be long term In your case both conditions are not satisfied. Hence you have to pay STCG tax.

Vk Duggal

219 Points Posted on 16 October 2007

Long term capital gain is exempt and hence the condition No. 2 stated by Mr. Ravi is of no use if security transaction tax is paid. You will have to short term capital gain tax if security transaction tax is paid.

ravi sankar

Chartered Accountant

101 Points Posted on 18 October 2007

Hai. I stated the conditions for investment in equities to get exempted. It is of no use for short-term gains. there is no exemptions for short-term gains. Itax will have to be paid. Security transaction tax is not covered by IT and has no relevance to IT

Guest

Posted on 19 October 2007

Hi Debdutto.. You are liable to pat STCG at the rate of 10%. The criteria that is applicable is realization of shares and receipt of amount. Even if you keep the funds with DP, you are said to realize the amount so liable to pay STCG. The instance of LTCG is not applicable as transaction through DP are subject to STT.