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how to calculate long term and short term capital gains income tax in India?

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 usha asked over 2 years ago

how to calculate long term and short term capital gains income tax in India? what are short term capital gains?

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5 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 veeru answered over 2 years ago

Capital gain arise on transfer of long term capital asset. Long term capital asset:- A capital asset held by assessee for more than 36 months immediately preceding the date of its transfer. However, a security not an unit listed in recognized stock exchange or an unit of an equity oriented fund or an unit of the unit trust of India or a Zero coupon bond will be considered as a long term asset if the same is held for more than 12 months immediately preceding the date of its transfer.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 ROSHNI answered over 2 years ago

Short term capital gain arise on transfer of short term capital asset Long term capital gain arise on transfer of long term capital asset capital gain calculation we deduct cost of purchase and improvement and transfer expense from sale consideration we use indexed cost of purchase and improvement in long term capital gain

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Data?1494421738 samkit kothari answered over 2 years ago

Gains from Capital Assets are called Capital Gains – these may be Long Term or Short Term Capital Gains depending upon the holding period. Usually, assets held for 36 months or less are termed short term capital assets and gain on their sale is short term capital gain. There are a few exceptions here – some assets are considered short term when held for 12 months or less. Assets sold after 36 months are called Long Term Capital Assets. For example – Land held for more than 3 years is termed as long term capital asset, Equity Funds are considered short term when held for 12 months or less, whereas Debt Funds are long term assets when held for more than 36 months .Therefore, its important to find out the specific holding period applicable to your asset, since it impacts how the capital gains will be calculated. To arrive at the Short Term Capital Gains – From the total Sale Price of the asset deduct cost of acquisition, expenses directly to sale, cost of improvements(if any) also deduct exemptions allowed under section 54(as applicable) – > the resulting amount is the Capital Gain. In case of Long Term Capital Assets, the only difference is, one is allowed to deduct Indexed Cost of Acquisition/Indexed Cost of Improvements from the sale price. Indexation is done by applying CII (cost inflation index). This increases your cost base (and lowers your gains) since the purchase price is adjusted for the impact of inflation. For e.g., if you purchased a house on 28th February 2007 for Rs 50lakhs, and sell it on 30th August 2014. Indexed Cost shall be calculated by applying CII to Rs 50lakhs. Therefore Rs 50lakhs x CII for 2014-15/ CII for 2006-07 or Rs 50lakhs x 1024/519 = 98.65lakhs is your cost of acquisition for calculating Long Term Capital Gains. It is important to consider the nature of asset and the period of holding to assess whether it is a Short Term/Long Term Capital Asset since it also impacts the rate of tax on its gains. Short Term Capital Gains form part of regular income and attract tax at the tax slabs applicable to you. However in case of sale of shares & equity oriented funds, Short Term Gains are taxed at 15%. Usually, Long Term Capital Gains are taxed at a special rate of 20%, but Long Term gains on Shares (on which STT is chargeable) and Equity Mutual Funds are not taxed. Given the complex nature of capital gains tax, as a taxpayer it would be wise to maintain details regarding your purchase/sale activity for capital assets.

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Data?1494421730 rohit awasthi answered over 2 years ago

Dear Friend Short term capital gain:- Capital gain arise on transfer of short term capital asset. Short term capital asset:- A capital asset held by assessee for **not** more than 36 months immediately preceding the date of its transfer. Long term capital gain:- Capital gain arise on transfer of long term capital asset. Long term capital asset:- A capital asset held by assessee for more than 36 months immediately preceding the date of its transfer. However, a security not an unit listed in recognized stock exchange or an unit of an equity oriented fund or an unit of the unit trust of India or a Zero coupon bond will be considered as a long term asset if the same is held for more than 12 months immediately preceding the date of its transfer. Calculation of long term capital gain Sale consideration - XXX Less Expenses for transfer - XXX Indexed cost of acquisition - XXX Indexed cost of improvement - XXX ---------- Long term capital gain - XXX Calculation of short term capital gain Sale consideration - XXX Less Expenses for transfer - XXX Cost of acquisition - XXX Cost of improvement - XXX ---------- Short term capital gain - XXX Thanks

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Open uri20170510 32134 8wx65y?1494421689 Charan Reddy answered over 2 years ago

At the time of Sale of any Asset, Tax is liable to be paid on the Gains earned on the sale of Asset. Such Gains could either be Short Term Capital Gains or Long Term Capital Gains. The basis of such Classification in the Income Tax Return has been given below:- Short Term Capital Gain (STCG): If the Asset is held for less than 36 Months Long Term Capital Gain (LTCG): If the Asset is held for more than 36 Months The classification of short term & long term capital gains and their tax rates is different in case of Shares and Mutual Funds. This article focusses on computation of capital gains for all assets except Shares and Mutual Funds.

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