Concessional rate of tax on sale of equity shares and units of equity oriented fund

Short Term Capital Gain arising from transfer of short term capital asset, being Equity Shares in a listed Indian company or units of Equity Oriented Fund shall be taxed @ 15 % w.e.f from assessment year (AY) 2009-10, provided the transaction of such sale is entered through recognized stock exchange & such transaction is chargeable to STT ( Securities Transaction Tax).

‘Equity Oriented Fund’ means a fund where the investible funds are invested by way of equity shares in domestic companies to the extent of more than 50% of the total proceeds of such fund and which has been set up under a scheme of a mutual fund specified u/s 10(23D).

The concessional rate will apply to all assessees including non residents and FIIs. However in case of a resident individual or HUF if the total income is less than maximum amount not chargeable to tax, then such short term capital gains shall be reduced by the amount which is not chargeable to income tax and the tax on the balance of such short term capital gains shall be computed at the applicable rate said above.

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