Cabinet cheers capital gains tax!

Gainer · 1 Cabinet cheers capital gains tax! Thu Jun 16, 2016 1:01 am

Gainer

Associate Director - Equity Analytics

Posts : 3451
Equity Stars : 10956
Reputation : 264
Join date : 2011-03-13

Cabinet cheers capital gains tax!

http://www.ft.lk/article/548785/Cabinet-cheers-capital-gains-tax-

stockback · 2 Re: Cabinet cheers capital gains tax! Thu Jun 16, 2016 1:27 am

stockback

Senior Vice President - Equity Analytics

Posts : 2945
Equity Stars : 8973
Reputation : 61
Join date : 2012-02-19

what is your idea about it.

visvajith · 3 Re: Cabinet cheers capital gains tax! Thu Jun 16, 2016 8:25 am

visvajith

Equity Analytic

Posts : 42
Equity Stars : 3537
Reputation : 3
Join date : 2014-11-20

capital gain tax is applied only for land sales. And will not apply for share transactions.

Shammi Dharshana · 4 Re: Cabinet cheers capital gains tax! Thu Jun 16, 2016 8:35 am

Shammi Dharshana

Senior Manager - Equity Analytics

Posts : 380
Equity Stars : 3696
Reputation : 0
Join date : 2015-08-19

Good news

Chinwi · 5 Re: Cabinet cheers capital gains tax! Thu Jun 16, 2016 10:04 am

Chinwi

Associate Director - Equity Analytics

Posts : 3097
Equity Stars : 8969
Reputation : 418
Join date : 2010-06-08
Location : Asia

The next question is how they are going to calculate it .

How to find bought value, deduction for retained period etc.
Normally people put lesser value in deeds to reduce stamp duty amt. Hence, the gvt may introduce standard deduction system.

In some countries they do like this :

STANDARD DEDUCTION FOR CAPITAL GAINS
HOLDING PERIOD - DEDUCTIBLE EXPENSES
1 year 92%
2 years 84%
3 years 77%
4 years 71%
5 years 65%
6 years 60%
7 years 55%
8 or more years 50%

Source: Global Property Guide

For ex. If a land held for 6 years sold @ 100,000 , accepted bought value = 100,000 x 60% = 60,000/-
Taxable capital gain = 40,000/- for 6 years

If CGT is 20@ then Tax = 40,000 x 20% = 8,000/-

Finally, if sold for 100,000 he has to pay 8,000 as CGT.

If the land bought 2 years ago then capital gain = 16,000/- CGT = 3,200/-

In this system, the actual expenses incurred can be deducted, especially if they are higher than the standard deductions stated above, but it must be supported by documents.