Capital Gains on Securities
Expert capital gains tax advisory in Goa — LTCG under Section 112A at 12.5%, STCG under Section 111A at 20%, grandfathering for pre-2018 equity, debt mutual fund taxation post-Finance Act 2023, NRI TDS and DTAA relief, and accurate Schedule CG filing in ITR-2 or ITR-3 by qualified Chartered Accountants in Panaji.
Budget 2024 significantly revised the capital gains tax landscape for securities. Long-term capital gains on listed equity shares, equity-oriented mutual funds, and units of business trusts are now taxed at 12.5% under Section 112A — up from 10% — on gains exceeding ₹1.25 lakh per financial year. The annual exemption threshold was simultaneously raised from ₹1 lakh to ₹1.25 lakh. Short-term capital gains on STT-paid listed equity moved from 15% to 20% under Section 111A. Both changes took effect from 23 July 2024.
The grandfathering provision for equity acquired before 31 January 2018 continues to protect pre-2018 gains. The deemed cost of acquisition is the higher of the actual purchase price or the highest quoted price on 31 January 2018 — capped at the actual sale price — ensuring only post-2018 appreciation is taxed. The Finance Act 2023 simultaneously removed the concessional LTCG treatment for debt mutual funds: all gains on funds with equity exposure below 35% are now short-term, taxed at applicable slab rates regardless of holding period.
Our capital gains practice in Panaji handles securities taxation for resident investors, HUFs, and NRIs — from grandfathering computations for pre-2018 equity portfolios to NRI TDS optimisation and DTAA treaty relief, F&O income classification, ESOP perquisite and capital gain reporting, and scrutiny-ready Schedule CG filing in ITR-2 or ITR-3.
Our Capital Gains on Securities Services
LTCG — Section 112A
Listed equity and equity MF gains above ₹1.25 lakh taxed at 12.5%. Grandfathering applied for pre-2018 holdings. Correct Schedule CG disclosure in ITR.
STCG — Section 111A
STT-paid listed equity and equity MF short-term gains taxed at 20%. Distinct from STCG on unlisted shares and other assets taxed at applicable slab rates.
Grandfathering — Pre-31 Jan 2018
Computing the deemed acquisition cost as the higher of actual cost or 31 Jan 2018 FMV — ensuring only post-2018 gains bear the LTCG tax of 12.5%.
Debt MFs & Gold Funds
All gains on debt mutual funds (equity below 35%) treated as STCG at slab rates regardless of holding period — correctly reflecting the Finance Act 2023 change.
Unlisted Shares & ESOPs
LTCG at 12.5% if held 24+ months; STCG at slab rate. ESOPs: perquisite on exercise and capital gain on eventual sale — both correctly reported in ITR.
NRI Securities — TDS & DTAA
TDS at 12.5%/20% on LTCG/STCG for NRIs; lower TDS certificate applications; DTAA treaty relief for India-US, India-UAE, India-UK, India-Singapore transactions.
F&O Income Classification
Futures and options income treated as business income — not capital gains. Turnover computation for the Section 44AB tax audit threshold and ITR-3 filing.
ITR Filing — Schedule CG
Accurate ITR-2 or ITR-3 with Schedule CG — grandfathering workings, 31 Jan 2018 FMV, Section 111A and 112A disclosures, loss set-off and 8-year carry-forward.
Our Capital Gains on Securities Workflow
Identify Securities
List all equity, MF, ETF, debt fund, and unlisted share transactions — categorised by asset type, exchange, and holding period.
Classify STCG or LTCG
Apply the correct holding threshold — 12 months for listed equity, 24 months for unlisted shares — to classify each transaction.
Apply Grandfathering
For pre-31 Jan 2018 equity holdings, compute the higher of actual cost or FMV on that date as the deemed acquisition cost.
Compute Tax & Set-Off
Calculate LTCG at 12.5% and STCG at 20% or slab. Set off STCL against STCG and LTCG; LTCL only against LTCG in the same year.
File Schedule CG in ITR
Report each category in Schedule CG of ITR-2 or ITR-3 with full computation workings, grandfathering details, and TDS credit claim.
Why Accurate Capital Gains on Securities Matters
Frequently Asked Questions
Under Section 112A, long-term capital gains on listed equity shares, equity-oriented mutual funds, and units of business trusts are taxed at 12.5% on gains exceeding ₹1.25 lakh per financial year. No indexation is allowed. Budget 2024 increased the rate from 10% and raised the exemption threshold from ₹1 lakh.
Under Section 111A, short-term capital gains on STT-paid listed equity and equity-oriented mutual funds are taxed at a flat 20% — increased from 15% by Budget 2024. These gains cannot be set off against the basic exemption limit available to resident individuals.
The cost of acquisition for LTCG computation is the higher of the actual purchase price or the highest quoted price on 31 January 2018, capped at the actual sale price. This ensures only gains accruing after 31 January 2018 bear the LTCG tax — protecting unrealised gains that existed when the tax was reintroduced in Budget 2018.
From 1 April 2023, gains on mutual funds with equity exposure below 35% — including debt funds, gold funds, and international funds of funds — are treated as short-term capital gains regardless of holding period, taxed at the investor's applicable income slab rate. No indexation is available. Units purchased before 1 April 2023 may qualify for LTCG if held over 36 months under transitional rules.
Short-term capital losses can be set off against both STCG and LTCG in the same year. Long-term capital losses can only be set off against LTCG. Unabsorbed losses can be carried forward for 8 assessment years if the ITR is filed on time. Capital losses cannot be set off against salary, business income, or other non-capital heads of income.
For NRI investors, TDS is deducted at 12.5% on LTCG (Section 112A) and 20% on STCG (Section 111A) — plus surcharge and cess — before redemption proceeds are credited. NRIs can apply for a lower TDS certificate (Form 13) if actual tax liability is lower, and can claim DTAA treaty benefits to further reduce effective tax rates.
Related Capital Gains Services
Capital gains query on securities?
Our qualified Chartered Accountants in Panaji, Goa handle securities taxation for resident investors and NRIs — grandfathering, debt MF rules, NRI TDS, and scrutiny-ready Schedule CG filing.
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