I bought shares in a company in 2016 and again in 2018. I’ve now sold both of them on March 31, 2021. If I evaluate long-term capital loss using the grandfathered price of shares owned in 2016 and some shares of the same company acquired after 2018, the result is a long-term capital loss. If I calculate with shares purchased after 2018 and ignore the grandfathered price of shares owned in 2016, the effect is a long-term benefit. Is it still possible to calculate using the grandfathered price from March 31, 2018?
Long-term capital gains on the selling of equity shares and mutual fund units were made taxable in Budget 2018, with gains above Rs 1 lakh being taxed at 10%. Gains up to the 31st of January 2018 were grandfathered to protect investor interests. As a result, grandfathering provisions extend to all stock purchased before January 31, 2018.
For equity investments before or on 31st January 2018, the Cost of Acquisition would come out to be higher than the individual cost of acquisition of an asset and lower than its fair market value and sale consideration.
In Schedule 112A of the Income Tax Return form, taxpayers must include scrip-wise information about LTCG arising from the selling of shares or units. As a result, separate disclosures will be required for shares/units purchased in 2016 and 2018 and sold in 2021. The resulting capital gain would be subject to taxation.
In 2013, I bought a residential plot and sold it in 2020. How much can I put into a second home to avoid paying capital gains tax?
— Shashi J Gupta
If the net consideration is spent in purchasing one residential house property, any benefit on the sale of a plot of land can be stated as excluded under Section 54F. To be eligible for this exemption, the new house property must be bought one year before or two years after the date of capital asset transfer or built within three years of the date of transfer. If you own more than one house on the date of the plot transfer, or if you buy/build another within one/three years of the initial asset transfer, you are not eligible for an exemption.