|
|
| *Ostroff, Fair and Company>>>India Taxes |
Actual market price or price minus brokerage has to be considered while calculating capital gains on shares? |
Actual market price or price minus brokerage has to be considered while calculating capital gains on shares? As per [Indian] Income Tax Act, in order to compute capital gains, you have to reduce following from the ACTUAL SALES CONSIDERATION in order to compute capital gains: a) Actual Cost of Purchase (indexed in case applicable) b) Actual Costs associated with sales like Brokerage. Please note STT will not be reduced for capital gains. Source(s): www.incometaxindia.gov.in Sale consideration as per Income tax act is sale price minus expenditure incurred for transferring the property. so brokerage is an expenditure incurred for transferring and hence has to be deducted for determining capital gains As per Income Tax Act 1961, in order to compute capital gain on sale of securities, brokerage paid actually is deducted from the sale proceeds. However in the case of securities, a gain is said to be in the nature of long term, if these are sold after the expiry of 1 year from the date of purchase unlike in other cases where it is 3 years.But such LTCG can be avoided from taxability if 3 conditions are satisfied:- 1. Must be sold on/after 1.10.2004. 2. Sold through a recognised stock exchange. 3. Securities Transaction Tax has been paid. In the case of Bonus shares, if such shares are alloted before 1.4.81 then their cost of acquisition will be their fair value on the 1.4.81. But if such shares are alloted after 1 april 1981 then the cost of acquisition will be nil. However brokerage paid is deductible in the case of bonus shares also. |
| Tags |
| United Kingdom Taxes Spain Taxes Singapore Taxes Mexico Taxes Ireland Taxes India Taxes Germany Taxes Canada Taxes Australia Taxes Small Business |
Finance Categories--Copyright/IP Policy--Contact Webmaster |