Capital Gains

a027412 · #1 22nd July 2007, 01:53 PM

Dear traders,
I heard that a fund purchased and sold within a year will entertain capital gains tax. i have two questiosn regarding this.
1

Is this true?

2

If so the tax will be deducted at source or we need to file during IT filing?

Thanks in advance

james · #2 23rd July 2007, 10:59 AM

Hi

yes its true any scrip sold within one year of purchase will be liable for short term capital gain. That is 10% of the gains made.

However there are no long term capital gains imposed as of now. If you sell after one year of purchase.

This tax is not deducted on the source and it is up to individuals to declare it in the tax returns.

At source only security transaction tax is deducted.

funfun1968 · #3 24th October 2007, 05:22 PM

Quote:

Originally Posted by james

Hi

yes its true any scrip sold within one year of purchase will be liable for short term capital gain. That is 10% of the gains made.

However there are no long term capital gains imposed as of now. If you sell after one year of purchase.

This tax is not deducted on the source and it is up to individuals to declare it in the tax returns.

At source only security transaction tax is deducted.

Dear James
If I sold stocks in short term and purchased another stocks with all money, do I still need to pay the tax? If not, what is the maximum duration of purchasing another stocks? Please help.

ranj_2k · #4 24th October 2007, 05:31 PM

Capital gain calculation of stock market is different from house property. If you buy any stock should be sold after one year to avail capital gain benefits. You will not pay any tax on the same. If you are selling in less than one year then you have to pay 10% short term capital gain on your profit.
In case of Property sell you have to invest the same in another property within three years time to get the capital gain benefits.

funfun1968 · #5 24th October 2007, 05:42 PM

Quote:

Originally Posted by ranj_2k

Capital gain calculation of stock market is different from house property. If you buy any stock should be sold after one year to avail capital gain benefits. You will not pay any tax on the same. If you are selling in less than one year then you have to pay 10% short term capital gain on your profit.
In case of Property sell you have to invest the same in another property within three years time to get the capital gain benefits.

Thank you very much.

striker_rage · #6 24th October 2007, 07:32 PM

cleared my doubts as well......thank you everyone

rkkarnani · #7 24th October 2007, 09:42 PM

Quote:

Originally Posted by ranj_2k

Capital gain calculation of stock market is different from house property. If you buy any stock should be sold after one year to avail capital gain benefits. You will not pay any tax on the same. If you are selling in less than one year then you have to pay 10% short term capital gain on your profit.
In case of Property sell you have to invest the same in another property within three years time to get the capital gain benefits.

I may be wrong, but somehow remember that the reinvestemnt in case of sale of immovable property needs to be done within ONE YEAR. Can you please recheck and post.
Regards.
R K Karnani

james · #8 25th October 2007, 10:39 AM

I think selling and buying of shares is independent of subsequent transactions with that money.

for example if u sell and make money and later with same money suffer loss, it does not matter.

Every gain made on shares withing one year of purchase is liable to short term capital gains (10% of profit made).

there are no long term capital gains (AS OF NOW).

ranj_2k · #9 25th October 2007, 12:44 PM

I do not think it is like that. It should be total of all shares bought in a year and sold within year while calculating the short term capital gain. Even losses can be carried forward to next year.

sand_9876 · #10 25th October 2007, 01:02 PM

A share sold within a year qualifies for short term. the income received minus tax paid is considered as your earnings and added in to total earnings. & tax as per the bracket you fit in.

To qualify for long term capital gain it has to be held with you more than year & profitsd arrived out of it can be exempted if you invest the same in capital assects.

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