Section 10(38) Exemption on LTCG on Sale of Shares

This exemption is only for

1.Equity Shares 

2.Units of Equity Oriented Fund

As per Section 10 (38)

Long Term Capital Gains

On

Sale of

Equity shares or Unit of Equity oriented funds

Is Exempt

if following conditions are satisfied

Shares must be sold on recognised stock exchange

      And

Equity oriented fund sold through recognized stock exchange or Sold to mutual fund

(b) Security transaction tax (STT) is charged on transaction  

New Amendment

Following Transactions are exempt even if STT Not Paid

-v-

• Acquisition of listed equity shares in a company which has been approved by the Supreme Court, High Court, National Company Law Tribunal, Securities and Exchange Board of India or Reserve Bank of India in this behalf
• Acquisition of listed equity shares in a company by any non-resident in accordance with foreign direct investment guidelines issued by the Government of India
• Acquisition of listed equity shares in a company by an investment fund referred to in clause (a) of Explanation 1 to section 115UB of the Act or a venture capital fund referred to in clause (23FB) of section 10 of the Act or a Qualified Institutional Buyer
• Acquisition of listed equity shares in a company through preferential issue to which the provisions of chapter VII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 does not apply

-ev-

Following Transactions are exempt even if not sold on recognized stock exchange

-v-

acquisition through an issue of share by a company other than the issue referred to in clause (a) i.e. preferential allotment.

• acquisition by scheduled banks , reconstruction or secularization companies or public financial institutions during their ordinary course of business
• acquisition which has been approved by the Supreme Court, High Courts, National Company Law Tribunal, Securities and Exchange Board of India or Reserve Bank of India in this behalf
• acquisition under employee stock option scheme or employee stock purchase scheme framed under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999
• acquisition by any non-resident in accordance with foreign direct investment guidelines of the Government of India
• where acquisition of shares of company is made under Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulation , 2011
• acquisition from the Government
• acquisition by an investment fund referred to in clause (a) to Explanation 1 to section 115UB of the Income-tax Act or a venture capital fund referred to in clause (23FB) of section 10 of the income-tax Act or a Qualified Institutional Buyer
• acquisition by mode of transfer referred to in sections 47 or 50B of the Income-tax Act, if the previous owner of such shares has not acquired them by any mode referred to in clause (a) or clause (b) or clause (c) [other than the transactions referred to in the proviso to clause (a) or clause (b)].

Note:- 

For listed shares, the period of holding is 12 months to be classified as long term

Unlisted Shares are not covered in this exemption as they are not listed on Stock Exchange

Q9 A

Calculate Long Term Capital Gain

Q9 B

Calculate Long Term Capital Gain/Loss

Q9 C

Calculate Short Term Capital Gain

Q9 D