Query on capital gains

in  short term capital gain cost inflation indexation not allowed.

in Long term capital gain cost inflation indexation allowed.

agree with ganeshan sir... i would like to add some more points.

Section 112(1) provides that any capital gain arising from a long term capital asset being the listed securities which are sold outside the stock exchange the long term capital gain shall be calculated on such securities as below:

a) Tax arrived at @ 20% on such long term capital gain after indexation u/s 48 or
b) Tax arrived at @ 10 % on such long term capital gain without indexation
Whichever is less.

The long term capital gain on equity shares or units of equity oriented mutual fund which are sold in the stock exchange and on which securities transaction tax is paid, is exempt u/s 10(38).

Exactly correct said by Ganeshan and Kaya..

I agree with both them..

indexation does not apply on foll.:

longterm capital gain

slump sale

sale of debentures

sale of depreciable assets

sale of securities by non resident that were purchased in forex

Agreed with Kaya

i will agree harini

Indexation only applies in case of long term capital Gains

Originally posted by : sheena
	indexation does not apply on foll.: longterm capital gain slump sale sale of debentures sale of depreciable assets sale of securities by non resident that were purchased in forex

 confused... as per other replies, indexed cost allowed for long term capital gain..,  is it applies to only specific longterm gains??

hi harini......

benefit of indexation is available only on "LTCG".........which is determined by calculating period of holding.......

but in the follwing cases  benefit of indexation is not available even if period of holding shows that the capital gain is of long term nature......

slump sale

sale of debentures or bonds issued by a company or government.

sale of depreciable assets where capital gain is determine u/s 50 ie capital gain / loss  is always a STCG / STCL.

sale of securities by non resident that were purchased in forex  ie FIRST PROVISIO to section 48.

You're welcome  "harini"...............