Short Term Capital Gains

Short Term Capital Gains Calculation

Capital gains arising from the transfer of a short-term capital asset is called as "Short Term Capital Gains" (STCG) [Section 2(42-B)].

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STCG Calculation - Non-Depreciable Assets

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

Sale Consideration XXX
Less: - Expenses Incurred XXX
----
Net Sale Consideration XXX
Deduct:
Cost of Acquisition XXX
Cost of Improvement XXX
----
XXX
----
Short Term Capital Gains/Loss [Tax at normal rates] XXX

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Special Provision relating to Shares

STCG in respect of a short-term capital asset, being listed securities or unit of equity oriented fund, is chargeable at a concessional rate of 10%.

However no Chapter VIA deductions is allowable.

In the case of Individuals and HUFs, the amount not exhausted in the Basic Exemption Limit (Rs.1,00,000) is allowable as deduction from such STCGs.

Non-Resident - Capital Gains from Shares

In the case of a non-resident, capital gains arising from the transfer of a capital asset being shares in, or debentures of, an Indian company (wherein all the transactions were carried out in foreign currencies) shall be computed subject to the following conversions: -

Cost of Acquisition of Shares Average of the telegraphic transfer buying and selling rate on the date of acquisition.
Sale Consideration and Expenditure incurred on Transfer Average of the telegraphic transfer buying and selling rate on the date of transfer.
Net Capital Gains Buying rate for telegraphic transfer as on the date of Transfer.

No indexation benefit available.

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STCG Calculation for Depreciable Assets

The STCG in relation to a depreciable asset (other than a undertaking engaged in the business of generation or generation and distribution of power) is determined as under

1) Block of Asset ceases to exist

Sale Consideration XXX
Deduct: -
Expenditure Incurred XXX
Opening WDV XXX
Actual Cost of New Asset XXX
----
XXX
----
STCG/Loss XXX
----

2) Block of Asset exists

Sale Consideration XXX
Deduct: -
Expenditure Incurred XXX
Opening WDV XXX
Actual Cost of New Asset XXX
----
XXX
----
STCG XXX
----

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Cost Inflation Index »

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