Now no Capital Gain without Tax Pain!

End Of Tax Honeymoon For Market Investors!

Understanding The New Capital Gains Regime

New Rules for Computation

• Present distinction between long term and short term gains to be eliminated.
• Current exemption for capital gains arising from transfer of personal effects and agricultural land beyond specified urban limits to continue.
• Base date for computing cost of acquisition shifted from 1^st April, 1981 to  1^st April, 2000. 
• Indexation benefits can be availed for all assets held for atleast one year.  

No More Tax Concessions

•  Zero tax on STT paid long term capital market gains and 15% concessional rate for short term market gains to end on 31^st March, 2011. 
• No more concessional rates of 10%/20% for taxing specified long term gains. 
• All capital gains to be taxed at the taxpayer’s applicable marginal rate. Securities Transaction Tax (STT) to be simultaneously eliminated.

 Exemptions Abolished & Redesigned

• Present exemption u/s. 54EC via investment in specified bonds abolished. 
• Current exemptions u/s. 54, 54B and 54F attempted to be redesigned under a new scheme of relief for roll over on the basis of a given formula.  (more…)