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Computation of Long Term Capital Gain/Loss

Table of Contents

Long term capital gain means capital gain arising from transfer of long term capital asset. Indexation benefit is available for long term capital gains.

Long term capital gain is computed as under

Long Term Capital Gain/Loss Amount
Full value of consideration
Less: Expenses incurred wholly and exclusively in connection with such transfer
                                                                                                        Net ConsiderationLess: Indexed Cost of acquisition
Less: Indexed Cost of improvement                                                                                              Long Term Capital Gains
Less: Exemption under section 54, 54B, 54D, 54EC, 54F, 54G, 54GA, 54GB
xxx
xxx
xxxxxx
xxxxxx
xxx
                                              Taxable Long Term Capital Gain (Loss if negative) XXX

Securities Transaction Tax (STT) is not allowed as deduction of expenses while calculating capital gain whether short term or long term.

Indexed Cost of Acquisition = (Cost of Acquisition x CII of year of transfer) / CII of year of acquisition of asset or CII for year 1981 whichever is later.

Indexed Cost of Improvement = Cost of Improvement x CII of year of transfer) / CII of year in which improvement took place

Cost Inflation Index (CII) Table

 

Rohit Pithisaria

I am a Chartered Accountant based in Jaipur (Rajasthan). Started TaxAdda in 2011 as a blog and now providing various service related to GST and Income Tax to the client all over India. Also writing actively for TaxAdda blog and our e-Magazine on GST & Income Tax.

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2 comments

  1. I AM INTERESTED IN SOFTWARE OF CALCULATING LONG TERM & SHORT TERM CAPITAL GAINS RELEASED FROM SALE OF SHARES .I AM LAYMAN SO SOFTWARE SHOULD OF CUSTOMER FRIENDLY.

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