LTCG and STCG calculation for staggered buying and selling

Income Tax Income from Capital Gains
#1

Q: For the purpose of LTCG and STCG calculation, How is the buy date and Sell date of shares determined if Buying and Selling is done in a staggered manner,ie, multiple buying and multiple selling trades.
eg:
If I buy shares on 3-Mar,2020 ,
Buy more shares on 3-Oct-2020 and
sell all of it on 15-Mar-2021…
and I have Gains

Would it be taxed as LTCG or STCG?

#2

Hi @Aby_Math

If the shares are held for more than 12 months, they will be considered as Long Term Capital Assets otherwise Short Term Capital Assets.

Also, FIFO method is used while computing the capital gains on the sale of stocks.

In your example, If you sold shares on 15/3/21 it will be considered that first you sold the shares bought on 03/3/20 and had LTCG on that shares and the remaining shares sold (if any) were bought on 03/10/20 and had STCG on them.

Hope this helps!

1 Like
#3

Thank you @Laxmi_Navlani ,it definitely helps.
Thank you for your time.

1 Like
#4

Dear Mam @Laxmi_Navlani,

I bought few shares on 06.Sep.2022, (5days ago) and i am going to gift those shares to my sister on 27.Sep.2022 (i.e.16 days from today) so my total holding period was only 22days (i.e. 06.Sep.2022 to 27.Sep.2022).
The stock is about to undergo split & bonus. so, my cost of acquisition will get reduced to Rs.1710 per share, whereas when i transfer those shares on 27.Sep.2022, its price would be around Rs.2,000 to Rs.2,500 per share (but definitely not less than that.)

My questions are :
I understand (from this website) that if my sister sold those shares, based on the date of selling, STCG or LTCG would be applicable to her.

  1. What if, my sister gift those shares to my wife, in March-2023 ? (i.e. 6months after she had received the gift from me), what is the tax implication for my sister ?

  2. Is a person allowed to gift shares to an immediate relative, when they themselves have received it as a gift from another relative?

  3. If my wife sell those shares in Oct-2023 will it considered as STCG (since it has been only 7months after receiving it from my sister) or will it be considered as LTCG (since i had bought it in Sep-2022 and gifted it to my sister in the same month)

Your reply is appreciated. Thank you.