Section 112A was implemented by the Finance Act 2018 to tax long-term capital gains mostly on selling of listed shares, equity-based mutual funds units and units of business trust. Schedule 112A covered tax gains that were previously excluded before the 2017-18 fiscal year (AY 2018-19). Previously, Section 10(38) provided a capital gains exemption from the selling of listed shares, mutual fund units and business trusts.
The criteria to tax capital gains are set out in Section 112A.
- The selling is to be made of listed stock shares, mutual fund units and business trust units.
- The shares are to be long-term capital investments.
- Shareholder purchase and selling transactions are entitled to STT (Securities Transaction Tax). In the event of equity-oriented mutual fund units or business trusts, the selling transaction is the responsibility of STT.
The criteria to tax capital gains are set out in Section 112A.
- The selling is to be made of listed stock shares, mutual fund units and business trust units.
- The shares ought to be long-term capital assets.
- Shareholder purchase and selling transactions are entitled to STT (Securities Transaction Tax). In the event of equity-oriented mutual fund units or business trusts, the selling transaction is the responsibility of STT.
In the event that the net result for just about any AY is a loss to any head of income apart from capital gain, the assessor is qualified to have the amount set against his income by any origin under the same head.
In the form of capital gains, a short-term capital loss may be offset by some capital gain. Thus, short-term capital losses could be compensated toward short-term capital losses and also long-term capital losses. That being said, long-term capital losses could only be offset against long-term capital gains.
The long-term capital benefit resulting from the sale of the securities listed on the recognized stock exchange is currently taxed at 10%. If there are some long-term capital losses arising from the selling of such securities, such losses may now be offset by some other long-term capital gains.
For More details – Official guide from Income tax department
