How LTCG tax will be calculated on shares where STT is not paid
BY ET CONTRIBUTORS | DEC 31, 2018, 10.04 AM IST
I purchased some shares between 1975 and 2000 for which I do not have a contract note. What should be considered the cost price to calculate long-term capital gain? Since no Securities Transaction Tax (STT) was paid, will I have to pay any additional tax?
Amit Maheshwari, Partner, Ashok Maheshwary and Associates replies, "We assume that you will pay STT when you sell these shares and they are listed. You will need to justify the cost and purchase date of these shares through documents like physical share certificates, bank statements, demat account statements, etc. The cost for these shares will be their actual cost or the closing price as on 31 January 2018 restricted to the actual sale prices of the share. If the total capital gains exceed Rs 1 lakh, the entire gain will be taxed at 10%. If these shares were unlisted at the time of purchase, their cost will be indexed up to 2017-18 to arrive at the capital gain. There are certain exceptions to the rule that STT has to be paid at the time of purchase—if shares were acquired in an IPO or were unlisted at the time of purchase or no STT was applicable at the time of purchase. If these exceptions aren’t applicable to you, then your capital gain will be taxed at 20%, instead of 10%."
I am moving to a new job after five continuous years of service with one company. I want to withdraw my employees' provident fund. Will the withdrawn sum be taxed?
Shubham Agrawal Senior Taxation Advisor, TaxFile.in replies, "Yes, you can withdraw the sum and it will be tax-free. According to income tax rules, any accumulated balance due and payable to an employee who has been in continuous service for a period of five years or more shall be excluded from his total income."