LTCG on Shares

Pankaj, My father (Senior Citizen, Below 80yrs) purchased 600 shares long back in 90's which now become 3600 nos after getting bonus shares at different time intervals, now he want to book some profit by selling the shares. If he sells all the shares & later again he purchases the same nos of share at reduced prices whether he will be liable for paying tax, if yes, what will be the tax calculation and also tell how can he save/reduce tax liability. He is getting pension & interest total is below 2 lac.

asked Jul 16 '15 at 13:20 by sakiv1089 18682339


As these have been kept for more than three years, its a long term gain and there won't be any income tax payable on gains.

answered Jul 24 '15 at 15:05 by Pankaj Batra 5.2k320

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Thanks a lot...
(Jul 24 '15 at 16:07) sakiv1089

What is Long term capital gain on sale of shares

If a share held in the company, and securities listed in a recognized stock exchange in India are transferred within 12 months from purchase, the gain or loss arising will be short term capital gain or loss.

If they are transferred after 12 months from the date of purchase, the gain or loss arising from sale will be a long term capital gain on sale of shares

Tax rates for short term and LTCG on sale of Shares

The tax rate on short term capital gain on transfer of equity shares is 15% if STT is paid and the transaction is through recognized stock exchange. In any other case, tax rate will be applicable as per income tax slab. Earlier we showed tax on LTCG & STCG

Long term capital gain tax(LTCG) on transfer of equity shares or unit of equity oriented fund is exempt u/s 10 (38) if shares or units are listed on a recognized stock exchange and STT is paid.

In any other case, tax rate is 20% for long term capital gain on shares

Calculation of LTCG on Shares:

Long term capital gain/loss = sale consideration less brokerage/commission paid less indexed cost of acquisition of shares (share purchase value)

You can also calculate long term capital gain on shares without indexation if shares are listed. In that case, you have to pay tax on capital gain at 10%.

Read more: http://www.quicko.com

answered Aug 23 '15 at 22:22 by Yash M Jhaveri 611

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Asked: Jul 16 '15 at 13:20

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Last updated: Aug 23 '15 at 22:22