LTCG on Sale of Shares
I have 2 queries relating to LTCG on sale of shares.
Query 1:
As per my Schedule 112A of ITR-2 there is a LTCG of Rs 4000 from sale of equity shares.
I notice that it has been set off against the LTCL carried forward from past years entered by me in Schedule CFL. This set-off has been made even though LTCG up to Rs 1 lakh is tax free. So my LTCL stands reduced by 4000 Rs.
Is this the correct treatment of LTCG from sale of shares?
Should not the entire 1 lakh tax-free gains available in current year be exhausted first, before setting off against past years losses?
Query 2:
What is the treatment of LTCG on sale of shares bought after 1-Apr-2018? Where should it be entered in ITR-2?
Thanks.
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Official comment
Hey Jaya,
In the case of LTCG under Section 112A, the gain is first adjusted with the brought forward loss and the exemption of INR 1 lac is available on the remaining LTCG. Thus, the treatment is correct and your LTCL will reduce by INR 4,000.
Under Budget 2018, the exemption under Sec 10(38) was removed. Further, a new Section 112A was introduced to levy 10% income tax on Long Term Capital Gains on the sale of equity shares, equity mutual funds and units of business trust in excess of Rs. 1 lac for a financial year. Sec 112A was applicable to FY 2018-19 (AY 2019-20) onwards.
Hope this helps :)
Comment actions -
Hey Jaya,
Grandfathering will be applicable on sale of all shares after 31-Jan-18 even if they were purchased before STT was introduced. Read more about LTCG on shares and grandfathering.
Hope this helps :)
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