Long Term Capital Gains

LTCG Calculation

Capital gains arising from the transfer of a long-term capital asset is called as "Long Term Capital Gains". (LTCG) [Section 2(29-B)].

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LTCG Calculation - Non-Depreciable Assets

The LTCG, in respect of a non-depreciable asset, are computed as under: -

Sale Consideration XXX
Less: - Expenses Incurred XXX
----
Net Sale Consideration XXX
Deduct:
Indexed Cost of Acquisition XXX
Indexed Cost of Improvement XXX
----
XXX
----
LTCG/Loss [Tax thereon 20% on Gains] XXX

Indexation is not available for bonds and debentures (except for Capital Indexed bonds of Government) and 80CCB Units and in the case of slump sale of industrial undertakings.

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Special Provision relating to Shares

In the case of a capital gain arising from the transfer of a long-term capital asset, being listed securities or unit of equity oriented fund, the assessee is exempt under section 10(36) or 10(38).

LTCG arising on sale of listed securities, not charged to securities transaction tax, and Zero Coupon Bonds shall be taxed at least of the following amounts: -

  • 20% on LTCG (with Indexation)
  • 10% on LTCG (without Indexation)

Where the assessee is an Individual or a HUF, being a resident,

the LTCG shall be reduced by the amount of difference between the Basic Exemption Limit and Total Income (excluding LTCG), if such reduced Total Income is less than the Basic Exemption limit.

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Indexed Cost Of Acquisition [Section 48]

Indexed cost of acquisition is calculated as under: -

Cost of Acquisition or FMV as on 01.04.1981 at the option of the assessee

X

Cost Inflation Index for the year in which the asset is transferred.

Cost Inflation Index number of the previous year in which the asset was first held by the assessee or 01.04.1981 whichever is later.

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Indexed Cost Of Improvement [Section 48]

Indexed cost of Improvement is calculated as under: -

Cost of Improvement

X

Cost Inflation Index for the year in which the asset is transferred.

Cost Inflation Index number of the previous year in which the improvement was made to the asset.

Related Topics

LTCG Calculator »

Cost Inflation Index »

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