Tuesday, March 22, 2011

Six smart things you should know about capital gains from online trading

1) Transactions in equity shares using the Internet trading platform are subject to taxation and have to be included in the income tax returns.

2) All gains from the sale of shares within one year of the date of purchase are subject to capital gains tax at 15%, along with the applicable surcharge and cess.

3) All losses from the sale of shares within one year of the date of purchase are eligible to be set off against capital gains for a period of eight years.

4) If you sell shares after a holding period of more than a year, the gains are exempt from tax. So, the losses from such a sale are also ineligible to be set off against gains.

5) The gains or losses have to be computed on the first in, first out principle. This means that the shares you buy first will have to be sold first.

6) If the income from such transactions exceeds Rs 20 lakh per year, the accounts have to be audited and treated as business income. 

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Source : ET

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