I have recently sold 20 shares of Jio Finance @ 345/- which were allotted free to me as shareholder of RIL. What will be the cost for purposes of capital gains calculation?

Ans: Hello Devendran,

Firstly, let's discuss your tax implications for selling the Pre-IPO shares after holding them for two years. In India, shares that you've held for more than one year are considered long-term capital assets. The gains from selling such assets are called long-term capital gains (LTCG). The tax on LTCG from equity shares is 10% if the gains exceed ₹1 lakh in a financial year.

However, there's an important catch here. The LTCG tax of 10% applies only if the Securities Transaction Tax (STT) was paid both at the time of purchase and sale of these shares. Since you bought Pre-IPO shares, it's likely that STT was not paid at the time of purchase as STT is typically only applicable for transactions occurring on a recognized stock exchange. In such cases, your gains may be taxed at 20% with indexation benefits (if applicable).

Moving on to the second part of your question about gifting shares to your son. Under current Indian tax laws, any gift received from a relative, including a parent, is not taxed in the hands of the recipient. So, if you gift these shares to your son, he won't have to pay any tax at the time of receiving the gift.

However, when your son eventually sells these shares, he'll have to pay tax on the capital gains. The cost of the shares for the purpose of calculating capital gains will be the cost at which you originally purchased them.

Please do consult with a chartered accountant or a tax consultant to understand all the details specific to your situation.

Hope this helps!

Ans: To calculate the capital gains tax for the ITR year 2023-24, we need to determine the capital gains made from the sale of the shop.

Calculation of Capital Gain:
Sale Proceeds - 60,00,000
Less Indexed Cost of Acquisition - 12,60,952 (= 4,00,000 / 331 X 105)
Capital Gain = 47,39,048

Capital gains tax = Capital gain X Tax rate
=47,39,048*20%
=Rs 9,47,809

Your wife is required to pay the tax of around 9.47 Lakhs on the gain of 47.39 Lakhs.

Disclaimer- kindly contact a CA for exact figure and calculation as the above has been calculated on relevant information provided, the above values may change subject to other facts.

Ans: No, interest is not considered as cost for calculating capital gain.

Ans: Brokerage Charges: Yes, you can deduct the brokerage charges of Rs 40,000 from the total sale proceeds before calculating the capital gains tax. The brokerage charges incurred in selling the property are considered as a legitimate expense and can be deducted from the sale proceeds.

Capital Gain Index: To calculate the indexed cost of acquisition for long-term capital gains tax, you need to use the Cost Inflation Index (CII) issued by the Income Tax Department. The formula to calculate indexed cost of acquisition is: Indexed Cost of Acquisition = Cost of Acquisition x (CII of the year of sale / CII of the year of acquisition). You can find the CII values for different financial years on the Income Tax Department's website.

Expenditure on Maintenance and Additions: Unfortunately, you cannot add expenditure spent towards maintenance, additions, etc., over the years without proper proof for tax deduction purposes. The Income Tax Department requires proper documentation and proof of expenses to claim deductions. Without proper documentation, these expenses cannot be considered for tax deduction.

It's always advisable to consult with a tax advisor or chartered accountant for accurate guidance tailored to your specific situation, as tax laws and regulations may vary. They can provide personalized advice and help you maximize tax benefits while ensuring compliance with tax laws.

Ans: I can't calculate your exact capital gains tax on the land sale as it depends on several factors not mentioned yet. However, I can explain how it's generally calculated in India and provide some guidance:

Factors affecting your capital gains tax:

Holding period: There are two types of capital gains tax on land - long-term capital gains (LTCG) and short-term capital gains (STCG).
LTCG applies if you held the land for more than 24 months. It benefits from an indexation mechanism that adjusts the purchase price for inflation, reducing your taxable gains.
STCG applies if you held the land for 24 months or less. The tax is calculated on the difference between the selling price and the purchase price without indexation.
Purchase price: This is the original price you paid for the land along with any documented improvement costs.
Sale price: This is the amount you received for the land sale minus any selling expenses.
Tax Rates:

LTCG: Currently, LTCG on land is taxed at 20% with indexation. However, you can save tax on LTCG by reinvesting the gains in specific options like new residential property or government bonds under relevant sections of the Income Tax Act.
STCG: STCG on land is taxed at a flat rate of 20% without indexation.
Recommendation:

To determine your exact capital gains tax liability, it's best to consult a chartered accountant (CA) or a tax advisor. They can consider all the factors mentioned above and calculate the tax based on your specific situation. They can also advise you on potential tax saving options available under the Income Tax Act for LTCG.