Pls tell us what is tax limit of short term gain and long term?

Question

Pls tell us what is tax limit of short term gain and long term?

Answer 1

Any gain out of sell of share/securities(capital gain) attracts I.Tax  @ 15% if it is purchased & sold within the same financial year but if it sold after365 days or after  the financial year whichever is more is tax-free.If you purchase a share on 23/5/2007 and sell it after 31/03/2009 it is tax free.

Answer 2

For information on capital gain, short term and long term and tax rates, read

http://mytaxes.in/index.php?topic=30.0

Answer 3

Any profit or gain arising from the sale or transfer of a capital asset is taxable as "capital gains". Capital asset is defined as a property of any kind, whether connected with the business or not, movable or immovable, tangible or intangible. A capital gain (or loss) from the sale or transfer of an asset can be a short term capital gain (or lose) or long term capital gain (or loss) depending upon the period the asset is held and the type of asset.

The following assets are not capital assets,

Any stock-in-trade,

Consumable stores or raw materials held for the purpose of business or profession,

Personal effects of the assessee that are movable and are held for personal use of any member of his family dependent upon him. However, jewellery, precious or semi-precious stones, paintings, sculptures or any work of art are treated as a capital asset./

Agricultural land in India provided it is not situated in a notified area or in any area within the jurisdiction of municipality or cantonment board have a population of 10,000 or more,

Gold bonds issued under the Gold Deposit Scheme, 1999,

6 1/2 per cent Gold Bonds, 1977 or 7 per cent Gold Bonds, 1980 or National Defence Gold Bonds, 1980 issued by the Central Government, and

Special Bearer Bonds, 1991.

Short Term Capital Asset

A capital asset held by an assessee for not more than 36 months immediately prior to the date of transfer is short term capital asset. However, some "financial assets" held for not more than 12 months are treated as short term capital assets,

Equity or preference shares in a company (whether shares are quoted or not),

Securities listed in a recognised stock exchange in India,

Units of UTI and units of mutual funds specified under section 10923D) (whether quoted or not) and

Zero coupon bonds (whether quoted or not) issued on or after June 1, 2005.

Long Term Capital Asset

A capital asset held by an assessee for more than 36 months immediately prior to the date of transfer is long term capital asset. However, some financial assets as listed above held for more than 12 months are treated as long term capital assets.

Computation of Short-term Capital Gain

1. Take the full value of consideration (full sale price without any deductions),

2. Deduct

Expenses incurred for the transfer,

Cost of acquisition, and

Cost of improvement.

3. Deduct exemptions under sections 54B, 54D and 54G.

Computation of Long-term Capital Gain

1. Take the full value of consideration (full sale price without any deductions),

2. Deduct

Expenses incurred for the transfer,

Indexed cost of acquisition, and

Indexed cost of improvement.

3. Deduct exemptions under sections 54, 54B, 54D, 54EC, 54ED, 54F and 54G.

Income Tax Rate on Long Term Capital Gains (section 112)

1. Long term capital gain is taxable at a flat rate of 20%.

2. If long term capital gain is covered by section 115AB, 115AC, 115AD or 115E, the tax rate is 10%. Also, if the listed securities/units are transferred and the benefit of indexation is not taken, then long term capital gain is 10%.

3. Deductions under sections 80C to 80U are not available on the long term capital gains.

4. Secton 112(1)a provides some relief to resident individual and HUF.

5. If the transcation (after September 30, 2004) is covered by securities transaction tax, then the capital gain is not charable to tax (section 10(38)).

Income Tax Rate on Short Term Capital Gains (section 111)

1. Short-term capital gain in respect of securities transactions (subject to securities transcation tax under section 115AD) (after September 30, 2004) are taxable at the rate of 10% (for AY 2008-09) and 15% (for AY 2009-10). On this short term capital gains, deduction under sections 80C to 80U is not available.