BANKING AFFAIRS

Detailed explanation-1: -However, LTCG on equity-oriented funds is subject to taxation after the Union Budget 2018. The Long-term capital gains (LTCG) over Rs 1 lakh on listed equity shares per financial year is taxable at the rate of 10% without the benefit of indexation.

Detailed explanation-2: -Under Budget 2018, the exemption under Sec 10(38) was removed. Further, a new Section 112A of Income Tax Act was introduced to levy a 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.

Detailed explanation-3: -The long-term capital gain will be the difference between the selling price of the asset and the actual cost of the acquisition, which is Rs 100 (Rs 300 – Rs 200). Example 3: You have purchased an equity share on 01 February 2017 at Rs 200. The fair market value as of 31 January 2018 was Rs 250.

Detailed explanation-4: -Long-term capital gains under Section 112A The period of holding should be more than one year to qualify for taxation under section 112A. The tax rate is 10% above a threshold exemption of Rs 1 lakh. This means the long-term capital gains covered under section 112A are not taxable up to Rs 1 lakh per financial year.