Exemption of Long Term Capital Gains on equity shares and units of equity oriented fund

Section 10(38) of the Income Tax Act, 1961 provides that long term capital gains arising from transfer of any equity share of a company or a unit of an equity oriented fund shall be exempt from tax w.e.f 1.10.2004 provided the transaction of sale is subject to securities transaction tax (STT). The exemption will apply to all assessees.

However, w.e.f assessment year 2007-08, long term capital gains arising on transfer of equity shares or a unit of an equity oriented fund, will be included for computing book profits in case of companies for the purpose of MAT u/s 115JB.

‘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).

For the purpose of calculating the percentage of equity shareholding of the fund, annual average of the monthly averages of the opening and closing figures shall be taken.

Taxmantra.com is here to solve all your tax worries, be it relating to Tax Returns, Tax Support or Tax Planning.  Just contact us; we are here to relieve you from all your tax worries.
Taxmantra.com provides most hassle free tax return filing/ online return filing experience. Once you have collected, your salary certificate and other documents, we request you to please log in to www.taxmantra.com/ereturns or you can also directly mail at info@taxmantra.com to submit the details. Upon receiving the documents, we would contact you to file your return of income.

Leave a Reply

Your email address will not be published.