Tax Implications- Investment In Shares
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Tax Implications- Investment in Shares ¾ Dividend Income Dividend received by shareholders is exempt from tax- section 10 (34) of IT Act. However, Company distributing dividends is liable to pay dividend distribution tax @ 16.995%
¾ Profits from sale / transfer of shares •
If considered as capital gains(capital gains= sale consideration – cost of acquisitionexpenses incurred in connection with such transfer)
Capital Gains Listed Shares (where STT Paid) Unlisted Shares
•
Long- term Capital Gains
Short-term Capital Gains
Period of holding
Rate
Period of holding
Rate
More than 1 year
Exempt u/s 10 (38)
1 year or less
1.33%
More than 1 year
22.66% (with indexation benefit)
1 year or less
33.99%
If Considered as business income-net income taxable @ 33.99%
Tax Implications- Investment in Debentures ¾ Interest income •
Interest received by debenture holder is taxable @ 33.99%
¾ Profits from sale /transfer of Debentures •
If considered as capital gains (capital gains = sale consideration – cost of acquisition –expenses incurred in connection with such transfer)
Capital Gains Listed debentures (where STT Paid) Unlisted debentures
•
Long- term Capital Gains Period of holding Rate
Short-term Capital Gains Period of holding Rate
More than 1 year
11.33%
1 year or less
33.99%
More than 3 year
22.66%
3 years or less
33.99%
If Considered as business income-net income taxable @ 33.99%
Note: Please contact your tax consultant to determine your exact tax status
¾ Profits from sale / transfer of shares •
If considered as capital gains(capital gains= sale consideration – cost of acquisitionexpenses incurred in connection with such transfer)
Capital Gains Listed Shares (where STT Paid) Unlisted Shares
•
Long- term Capital Gains
Short-term Capital Gains
Period of holding
Rate
Period of holding
Rate
More than 1 year
Exempt u/s 10 (38)
1 year or less
1.33%
More than 1 year
22.66% (with indexation benefit)
1 year or less
33.99%
If Considered as business income-net income taxable @ 33.99%
Tax Implications- Investment in Debentures ¾ Interest income •
Interest received by debenture holder is taxable @ 33.99%
¾ Profits from sale /transfer of Debentures •
If considered as capital gains (capital gains = sale consideration – cost of acquisition –expenses incurred in connection with such transfer)
Capital Gains Listed debentures (where STT Paid) Unlisted debentures
•
Long- term Capital Gains Period of holding Rate
Short-term Capital Gains Period of holding Rate
More than 1 year
11.33%
1 year or less
33.99%
More than 3 year
22.66%
3 years or less
33.99%
If Considered as business income-net income taxable @ 33.99%
Note: Please contact your tax consultant to determine your exact tax status
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