Tax on long term capital gains on sale of equity shares etc.

(1) Conditions to be satisfied for applicability of section 112A (Section 112A(1))

Notwithstanding anything contained in section 112, the tax payable by an assessee on his total income shall be determined in accordance with the provisions of section 112A(2), if the following conditions are satisfied:

(1) The total income includes any income chargeable under the head “Capital gains”;

(2) The capital gains arise from the 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;

(3) securities transaction tax has been paid as under:

(a) In the case of equity shares- In a case where the long-term capital asset is in the nature of an equity share in a company, securities transaction tax has been paid on acquisition and transfer of such capital asset; or

(b) In the case of unit of an equity oriented fund or a unit of a business trust- in a case where the long-term capital asset is in the nature of a unit of an equity oriented fund or a unit of a business trust, securities transaction tax has been paid on transfer of such capital asset.

(2) Tax payable on total income if it includes such long-term capital gain (section 112A)(2))

The tax payable by the assessee on the total income referred to in section 112A(1) shall be the aggregate of-

(1) The amount of income-tax payable on the total income as reduced by the amount of long-term capital gains referred to in section 112A(1) as if the total income so reduced were the total income gains referred to in section 112A(1) as if the total income so reduced were the total income of the assessee.

Residential Status