I have bought some shares (50) at Rs.10 each and then 50 shares again at 20Rs each. Now I wish to sell 60 shares after 6 months with the price being 70 Rs per share . How do I calculate tax on these ?
Should it be on (selling price * 60) - (avg cost per share * 60) or something else ?
Short term capital gain on shares should be calculated on the basis of FIFO ( First in first out ) method.
Your short term capital gain will be as under if you sell at say Rs.70 :
SALE PRICE ( RS. 70 * 60 SHARES ) 4200
LESS: COST PRICE ( RS. 10 * 50 SHARES ) 500
( RS. 20 * 10 SHARES ) 200 700
SHORT TERM CAPITAL GAIN 3500
Calculation given above is proper & correct.
Short capital gain will be as per abv calcln..
HI
Sale Price -------------------------------------------------------------4200
Less: FIFO basis cost of acquisition(50*10)+(10*20)----700
STCG-------------------------------------------------------------------3500
Rate of Tax as per 111A 15% -----------------Tax--------------525 + EC..
Yes all the above calculations are correct. Accounting as per FIFO basis
Can we option to choose the cost of 50 shares as Rs20/- and 10 shares @ Rs.10/-.
AMIT
CAclubindia
