Tax on long-term capital gains on units
[Proviso under clause (d) to section 112]
[W.e.f. A.Y. 2015-16]
Under the existing proviso, where tax payable on long-term capital gains arising on transfer of a capital asset, being listed securities or unit or zero coupon bond exceeds 10% of the amount of capital gains before allowing for indexation adjustment, then such excess shall be ignored. As long-term capital gains is not chargeable to tax in the case of transfer of a unit of an equity oriented fund which is liable to securities transaction tax, the benefit under section 112 in respect of unit cover only the unit of a fund, other than an equity oriented fund.
The above proviso has been amended so as to allow the concessional rate of tax of 10% on long term capital gain to listed securities (other than unit) and zero coupon bonds.
Hence, long-term capital gain from units other than the units of equity oriented fund shall now be taxable @
20% after indexation. The concessional rate of tax of 10% shall not be applicable in the case of such units.
Units transferred on or after 01-04-2014 but before 11-07-2014 to be allowed benefit of existing concessional rate of tax: The Finance (No. 2) Act, 2014 has further inserted second proviso to provide that where such units have been transferred on or after 01-04-2014 but before 11-07-2014, it will continue to get the benefit of the above proviso i.e. if there is a long-term capital gain from the transfer of such units, the tax will be levied at the minimum of the following rates:
(i) 20% after indexation of cost,
(ii)10% without indexation of cost.