Selling of Shares

Earlier long term capital gain on sale of shares was exempt but now from last year they are taxable @10%.

So you will also attract long term capital gain on sale of such shares and you need to calculate it's cost as per the method provided in section 112A.

If you want I can help you with calculation of capital gain and also help in filing ITR.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Dear Sir,

Hope you are doing well !!

For the purposes of calculating capital gains on such properties purchases on or before 2001, you have to know the fair market value (FMV) of a property in 2001.

According to the Income-tax Act, 1961, fair market value is the price that the capital asset would ordinarily sell in the open market on the relevant date.

It is advisable to first get the valuation of the property as on 01.04.2001 done from the registered valuer."

Further, there will be LTCG tax@10% liability arise on selling of shares.

Before Assessment Year 2018-2019, long-term capital gain tax on transfer of equity share, units of equity oriented funds and units of business trust was exempted as per provisions of section 10 (38).

From 1st April, 2018, provisions of section 112A is applicable to tax income arising from transfer of equity share, units of equity oriented funds and units of business trust.

First of all you need to find the fair market value of the house for 2001-02 and then apply indexation and find capital gain amount.

If you think that you will purchase house in next 2-3 years then you can deposit the capital gain amount in capital gain account scheme or else you can pay tax @20% on such capital gain.

Thank you

Hi,

If you sale shares of L&T and if your total capital gain amount exceeds INR 1 lacs, you will have to pay 10% capital gain tax on amount in exceeds of INR 1 lacs.

Please note that capital gains shall be calculated after grandfathering the investment.

The cost of acquisition shall be higher of:

1. The actual COA of such investments; and
2. The lower of-

   • 
     Fair Market Value (‘FMV’) of such investments as on 31.1.18; and
   • the Full Value of Consideration received or accruing as a result of the transfer of the capital asset i.e. the Sale Price
     

- As the shares of L&T are listed on stock exchange therefore your are eligible for grandfathering clause. You need to compare cost of shares and FMV as on 31.01.2018 or selling price of the share to arrive at the capital gain.

- In respect to sale of house, first you need to get the valuation report of the house as on 01.04.2001 to find out the FMV of the property as on 01.04.2001 and compare the FMV with the cost of the acquisition of the house i.e Rs.3.45 lacs. The higher of the FMV or cost will be considered as COA and accordingly will be indexed till the date of sale of the house. To avail exemption benefit you need to reinvest either in house property or specified bonds.

For sale of house property, long term capital gains shall be taxable @ 20% plus cess.

However, you may opt for reinvestment options for claiming capital gain exemption.

Exemption can be claimed under section 54 by investing the capital gain amount into new residential house property within 2 years of sale or construction of new residential house property within 3 years of sale.

The amount needs to be deposited in capital gain deposit account if investment is not done before due date of return filing.

Exemption can be claimed under section 54 EC by investing the capital gain amount in eligible bonds within 6 months of sale. Such bonds shall be redeemable after 5 years.