Taxation of long term capital gains on sale of equity shares and units

The Finance Act 2018 has made amendment in taxation of LTCG on shares and securities. The taxation on LTCG on equity share and units sale will be as under:

1. For purchase and sale before 31st Jan 2018 – LTCG are exempt under section 10(38) of income tax act.
2. For Purchase before 31st Jan 2018 and sale after 31st Jan 2018 but before 1st Apr 2018 – LTCG are exempt under section 10(38).
3. For Purchase before 31st Jan 2018 and sale on or after 1st Apr 2018 – LTCG are taxable but LTCG upto 31st Jan 2018 are exempt.
4. For Purchase after 31st Jan 2018 and sale after 31st Jan 2018 – LTCG are taxable.

Note:
a) Tax will be charged only on transfer of equity share or unit on or after 1st Apr 2018.
b) From A.Y. 2019-20 LTCG exceeding Rs. 1 Lakh will be taxed at the rate of 10%.
c) Benefit of indexation will not be available in computing of LTCG on sale of equity shares and units.
d) TDS is not required to be deducted in case payment of LTCG to a resident taxpayer.
e) Long term capital Loss from sale done on or after 1st Apr 2018 can be set-off against any other LTCG and balance loss, if any, can be carried forward to subsequent 8 years for set-off against LTCG.

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