By Chirag Nangia
I had bought shares of one firm in 2016 and once again in 2018. Now I have sold each on March 31, 2021. If I take the grandfathered value of shares held in 2016 separately with some shares of the identical business bought right after 2018 and calculate lengthy term achieve/ loss, the outcome is lengthy-term capital loss. If I do not look at grandfather-ed value of shares held in 2016 and calculate with shares bought right after 2018, then the outcome is lengthy term achieve. Can I nevertheless use the grandfathered value of date 31/3/18 or not for calculation?
—Vikas
Vide Budget 2018, lengthy term capital achieve on sale of equity shares and units of mutual fund was made taxable and it was stipulated that such gains, in excess of Rs 1 lakh would be taxed at the price of 10%. However, in order to guard the investor interests, gains up to 31 January 2018 have been grandfathered. So, grandfathering provisions apply to all the shares acquired just before January 31, 2018.
For equity shares and equity mutual funds bought on or just before 31st January 2018, the Cost of Acquisition shall be larger of—(i) the price of acquisition of such asset and (ii) decrease of—(A) fair marketplace worth of such asset and (B) sale consideration of such asset.
The Income Tax Return type demands the taxpayers to provide scrip-sensible facts in schedule 112A with respect to LTCG arising from the sale of shares or units. You shall consequently have to make separate disclosure for shares/ units bought in 2016 and 2018 and sold in 2021. The resultant capital achieve shall be brought to tax accordingly.
I bought a residential plot in 2013 and sold it in 2020. How considerably do I have to invest in yet another residence to save capital achieve tax?
—Shashi J Gupta
Any achieve on sale of a plot of land can be claimed as exempt beneath Section 54F, if net consideration is invested in obtain of one residential residence house. To claim such an exemption, the new residence house has to be bought inside one year just before or two years right after the date of transfer of capital asset or constructed inside a period of 3 years right after the date of transfer. Exemption is not permitted if you personal more than one residence on the date of transfer of the plot, or if you obtain/ construct yet another inside one/ 3 years from transfer of original asset.
The writer is director, Nangia Andersen India. Send your queries to