Short term capital gain on sale of equity shares

Short term capital gain on sale of equity shares means gain arising on sale of equity shares held for less than one year is taxable at 15% under section 111A of Income Tax Act 1961. On sale of equity shares listed on recognized sock exchange,units of business trust and units of business trust short term capital gain arising on this is taxable under section 111A. Equity shares listed on recognized sock exchange,units of business trust and units of business trust transferred through recognized stock exchange is liable to securities transaction tax transferred on or after 1-10-2004 are covered under section 111A.

Short term capital gain on sale of equity shares
Short term capital gain on sale of equity shares
Short term capital gain on sale of equity shares
Note:Here equity oriented mutual fund means 65% of its investible fund is invested in equity shares of domestic company and mutual fund which is specified under section 10(23D).
 
Tax Rate under section 111A: Short term capital gain on sale of equity shares under section 111A attracts tax rate of 15.60% inclusive of education cess.
 
Exemption if STT not paid is given in following cases from assessment year 2017-18:
  • Transaction took place on recognized stock exchange located in the International Financial Service Centre,and
  • foreign currency is mode of consideration.
Following are the examples of STCG covered under section 111A.
  1. Short term capital gain arising on sale of equity shares on which securities transaction tax is paid and sold on recognized stock exchange.
  2. Short term capital gain arising on sale of equity oriented mutual fund on which securities transaction tax is paid and sold on recognized stock exchange.
  3. Short term capital gain arising on sale of units of business trust on which securities transaction tax is paid and sold on recognized stock exchange.
  4. Short term capital gain arising on sale of units of business trust,sale of equity shares and  sale of equity oriented mutual fund on which securities transaction tax is not paid and sold on recognized stock exchange located in International Financial Service Centre.
     FAQS:Short term capital gain on sale of equity shares u/s 111A of Income Tax Act 1961
 
    Q.Whether basic exemption limit available against STCG chargeable under section 111A?
    A.Yes basic exemption limit available against Short term capital gain on sale of equity shares chargeable under section 111A only for resident     individual/huf and not for non resident individual/huf.
 
Note:Only un exhausted basic exemption limit is available to adjust against Short term capital gain on sale of equity shares chargeable under section 111A,i.e first all income other STCG chargeable under section 111A is required to be adjusted and than Short term capital gain on sale of equity shares chargeable under section 111A can be adjsuted against basic exemption limit.
    
    Q.Whether deduction available under section 80C to 80U in case of STCG?
    A.No deduction is not available under section 80C to 80U in case of Short term capital gain on sale of equity shares chargeable to section 111A,however deduction is available in case of other STCG.
 

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