LONG TERM CAPITAL GAIN TAX REG

I AM AN INDIVIDUAL AND TATA MOTORS A ORDINARY SHARES DEMERGER WITH TATA MOTORS LTD AND THEY GIVE DEEMED DIVIDEND AMOUNT OF Rs.59000/FOR 200 SHARES AND ALSO THEY GIVE CONSIDERATION AMOUNT FOR THE SAID SHARES Rs.229000/ AFTER DEDUCTING DEEMED DIVIDEND BALANCE AMOUNT OF Rs.179000/ TO BE TREATED AS LONG TERM CAPITAL GAIN SAID BY THE COMPANY THROUGH THEIR EMAIL.MY CLARIFICATION IS IN THIS AMOUNT MAY I DEDUCT Rs.125000/ UNDER SECTION 112A IN Rs.179000/AND BALANCE AMOUNT OF Rs.54000/IS TAXABLE UNDER CAPITAL GAIN TAX OR Rs.179000/ IS FULLY TAXABLE..
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Quick Summary
This discussion clarifies the tax treatment of a Tata Motors share demerger. An individual received a deemed dividend and consideration for their shares, resulting in a Rs. 179,000 long-term capital gain. The query confirms that the Rs. 125,000 deduction under Section 112A can be applied, leaving Rs. 54,000 as the taxable capital gain, rather than the full amount being taxed.

 

Under Section 112A, you can deduct Rs. 125,000 from the gain, and the balance amount of Rs. 54,000 will be taxable under capital gains tax. 

Here's the calculation: Rs. 179,000 (gain) - Rs. 125,000 (deduction) = Rs. 54,000 (taxable capital gain) So, Rs. 179,000 is not fully taxable.

 You can deduct Rs. 125,000, and only Rs. 54,000 will be subject to capital gains tax.

Transaction Date is important
Transaction Date is 25-09-2024...

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