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Indexation Benefit on State Govt. Loan securities

Others 280 views 1 replies
Our client is a Co-operative Bank and they earned long term capital gain on Govt Security (State govt. Development Loan) our issue is -
1. is this securities is eligible for indexation under second proviso to sec. 48
2. if answer is no then can we claim tax rate @ 10% without indexation instead of 20% with indexation u/s 112
Replies (1)
1. Yes
Indexation helps investors in long-term debt funds /debts to save taxes. If you sell investments in debt funds / debt after three years, the gains are treated as Long Term Capital Gains (LTCG). LTCGs are taxed at 20 per cent with the indexation benefit. Indexation allows you to inflate the purchase price using cost Inflation index


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