LTCG tax: Govt extends indexation benefit to share sale in unlisted cos
New Delhi: Giving some relief to investors, the government on Wednesday extended indexation benefit for computing tax liability on sale of shares listed after January 31, though capital gains arising from such transactions will continue to be taxed at 20 per cent.
The indexation benefit- which takes into account the impact of inflation on acquisition cost- will not be available on gains made from sale of listed securities, as per the amendments to the Finance Bill, which was passed by Lok Sabha on Wednesday.
The 2018-19 Budget had after a gap of 14 years reintroduced 10 per cent tax on long-term capital gains(LTCG) exceeding Rs 1 lakh from sale of shares.
Currently, 15 per cent tax is levied on capital gains made on sale of shares within a year of purchase. However, LTCG tax is nil for shares sold after a year of purchase.
Long-term capital gains on sale of unlisted shares is taxed at 20 per cent, while in case of short term capital gains it is 30 per cent.
The finance ministry had received various representations demanding removal of LTCG tax.