Indexation benefit for listed shares

Income Tax
1

Hello,

I bought few listed shares around 10 years back and the stocks are still listed, but there is no price appreciation. If I sell those shares with off-market transaction, I can take benefit of indexation and book long term capital loss, which can be set-off against any other long term capital gain. Is this understanding correct?

Thanks,

Deepak

2

Hi @deepakm007

LTCG on listed equity shares on which STT is paid are taxable u/s 112A.
You can set off the LTCL only against LTCG.

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3

I did not know that Indexation benefit is available while calculating LTCG for listed shares. Please give reference of the relevant section of the Income Tax Act and oblige.

4

Hi @nayakd1

In the case of LTCG from listed equity shares on which STT is paid, the gains above ₹1 lakh are taxable at 10% u/s 112A.

5

You modified the earlier opinion :(.

So even for off-market sale transaction for listed share, section 112A will apply?

7

Hi @deepakm007

Apologies.
Let me correct myself.

As per section 112A, the LTCG from listed equity shares on which STT is paid shall be taxed at 10% above ₹1 lakh.

In case of an off-market transaction, there is no STT paid, and hence the rate of tax shall be 10% without indexation benefit or avail of the benefit of indexation; and pay tax on the gains at 20%. You can choose the option in which the tax liability is the lowest.

Hope this clarifies.

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