Tax burden on capital gains - needs clarifications from experts

K.Haputantri

K.Haputantri

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As far as I know there is no tax burden on capital gains if one holds the shares for one year. I think this is applicable only to IPOs & private placements and not to trading in the secondary market. If this is applicable to day trading & swing trading etc,. also then, there will be heavy tax burden on profits. ?Am I correct, pl. clarify.

Gaja

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K.Haputantri wrote:As far as I know there is no tax burden on capital gains if one holds the shares for one year. I think this is applicable only to IPOs & private placements and not to trading in the secondary market. If this is applicable to day trading & swing trading etc,. also then, there will be heavy tax burden on profits. ?Am I correct, pl. clarify.

The shares disposed after 2 years ( not listed ), exempted from Income Tax, Shares Subject to Share Transfer Levy ( Listed ), also exempted from IT, without time limit.

There is a Tax Called N.B.T and not cleared whether that is applicable on the Sales Proceeds, earlier Turnover Tax specifically exempted the Share Trading from T.T

K.Haputantri

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Thanks Gaja for your clarification.

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To my knowledge, the only tax on share trading in the Market is the STL, Share Transaction Levy. No Capital Gains Tax. No matter how much you trade nor how long you hold a share - a few seconds or several years.

Chinwi

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All the charges including taxes are printed back leaf of bought/sold note . No other income / transfer ...... tax

Gaja

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Chinwi wrote:All the charges including taxes are printed back leaf of bought/sold note . No other income / transfer ...... tax

No friend in addition to those mentioned at present if the TURNOVER Exceeds 25 Million for the Quarter then Liable to Economic Service Charge on the Full Turnover!

K.Haputantri

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?Any thing about personal income tax on capital gains after two years of IPO. Kindly clarify.

Gaja

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K.Haputantri wrote:?Any thing about personal income tax on capital gains after two years of IPO. Kindly clarify.

For the companies Listed, even if you disposed on the 1st day in the case of IPO or Private placement, or for the same day trading ( buy & sell ) only tax applicable is the Share Transfer Levy, which is add or deducted from the Purchase Cost or Selling Proceeds respectively.

No further Income Tax is applicable and presently capital gains are exempted from IT

If your sales proceeds exceeds 25 Million for a quarter then E.S.C is applicable as of now.

Hope this clear your doubt!

K.Haputantri

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Thanks Gaja for your clarification.

Backstage

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What percentage is the E.S.C. and at what point is it levied ? in your annual declaration ?

Thanks in advance Smile

Gaja

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Backstage wrote:What percentage is the E.S.C. and at what point is it levied ? in your annual declaration ?

Thanks in advance

presently its .25% on the turnover, if it exceeds 25 Million for Quarter

mra

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No income tax payable on share profit gain. as its already included on buy / sell note. if you want to, you can show the gain as profit and take in to audit. but in case of losses you can't deduct in audited a/c

rijayasooriya

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Gaja wrote:

Chinwi wrote:All the charges including taxes are printed back leaf of bought/sold note . No other income / transfer ...... tax

No friend in addition to those mentioned at present if the TURNOVER Exceeds 25 Million for the Quarter then Liable to Economic Service Charge on the Full Turnover!

Does that mean even u sell for a loss u have to pay those tax ?

Gaja

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rijayasooriya wrote:

Gaja wrote:

Chinwi wrote:All the charges including taxes are printed back leaf of bought/sold note . No other income / transfer ...... tax

No friend in addition to those mentioned at present if the TURNOVER Exceeds 25 Million for the Quarter then Liable to Economic Service Charge on the Full Turnover!

Does that mean even u sell for a loss u have to pay those tax ?

Yes, also from 01.04.2012 the Economic Service Charge is taken out for the companies, who are liable to pay income tax, according the companies enjoying tax holidays or companies making losses liable to pay e.s.c

At present despite the fact whether you make profit or loss, if your turnover exceed more than 25 Million per Quarter then whether individual or company is liable to pay E.S.C

rijayasooriya

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Thanks Gaja for clarification

Chinwi

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Gaja wrote:

Chinwi wrote:All the charges including taxes are printed back leaf of bought/sold note . No other income / transfer ...... tax

No friend in addition to those mentioned at present if the TURNOVER Exceeds 25 Million for the Quarter then Liable to Economic Service Charge on the Full Turnover!

Thank Gaja. I did not know / notice it. (may be due to the threshold is far away from my reach. )

I hope I and many of us will join ESC payers club in few years from now. :-)

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Tax burden on capital gains - needs clarifications from experts

1 Tax burden on capital gains - needs clarifications from experts Thu Jan 12, 2012 11:02 am

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