Hi Sreekanth
Please could you help me to know how is the capital gains tax on profits from mutual fund and shares. In particular suppose if i buy 100 shares @ 250/- each on 01-01-2015 after which share price goes down. Again buying 100 shares @ 200/- on 15-06-2015. now average cost is arrived @ 225/- per share thereafter the share price goes up and i sell 200 shares @ 270/- each
how is the calculation? will i be required to pay capital gains tax if selling happens after 1 year and less than 1 year and on what amount is tax calculated
Looking forward hearing from you
2 Answers
Hi,
When you redeem or sell the shares, 'first in - first out' method is followed. So, the respective purchase price is the 'cost of acquisition'.
No Long term capital gain taxes are levied if shares are held for more than 12 months.
For Short term capital gains - Cost of acquisition and sale price are considered for CG calculation. The applicable tax rate on STCG is 15%.
Kindly note that expenditures involved in connection with sale of shares (ex-brokerage) can be deducted from the sale proceeds.
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