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New regime for taxation of long-term capital gains on sale of equity shares etc.

Budget - Dated:- 5-2-2018 - Under the existing regime, long term capital gains arising from transfer of long term capital assets, being equity shares of a company or an unit of equity oriented fund or an unit of business trusts , is exempt from income-tax under clause (38) of section 10 of the Act. However, transactions in such long term capital assets carried out on a recognized stock exchange are liable to securities transaction tax (STT). Consequently, this regime is inherently biased against .....

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l gains arising from transfer of a long term capital asset being an equity share in a company or a unit of an equity oriented fund or a unit of a business trust shall be taxed at 10 per cent. of such capital gains exceeding one lakh rupees . This concessional rate of 10 per cent. will be applicable to such long term capital gains, if- i) in a case where long term capital asset is in the nature of an equity share in a company , securities transaction tax has been paid on both acquisition and tran .....

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pany. Similarly, the requirement of payment of STT at the time of transfer of long term capital asset, being a unit of equity oriented fund or a unit of business trust, shall not apply if the transfer is undertaken on recognized stock exchange located in any International Financial Services Centre( IFSC) and the consideration of such transfer is received or receivable in foreign currency. Further, the new provision of section 112A also proposes to provide the following:- i) The long term capital .....

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of acquisition of such asset; and b) the lower of - (I) the fair market value of such asset; and (II) the full value of consideration received or accruing as a result of the transfer of the capital asset. (iii) equity oriented fund has been defined to mean a fund set up under a scheme of a mutual fund specified under clause (23D) of section 10 and,- a) In a case where the fund invests in the units of another fund which is traded on a recognized stock exchange, (I) A minimum of 90 per cent. of th .....

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