Impact Of LTCG On Equity
Sale of Equity Shares on recognised stock exchange
(STT paid at the time of sale and purchase)
Date of purchase
01-Oct-17
No of Shares
10,000
Cost per share `150
FMV
(Highest quoted price on Jan 31,2018) `200
Date of Sale
01-Dec-18
Sale price
`250
Calculation of Capital Gain
Sale Consideration `25,00,000
Less: Cost (Higher of A or B) `20,00,000
Long term capital gain `5,00,000
Taxable long term capital gain
(exceeding `100,000) `4,00,000
Tax on long term capital gain @10%
`40,000
Add: Health and Education cess @4%
Total Tax (FY 2018-19)
(In FY 2017-18 Tax = NIL)
`1,600
``41,600
Notes
Cost of Acquisition (A) `15,00,000
Lower of two:- (B) `20,00,000
-Value as on Jan 31,2018 `20,00,000
-Sale consideration `25,00,000
Table B
Source: Kuldip Kumar
Investment in Pradhan Mantri Vaya Vandana
Yojana: Investment cap in Pradhan Mantri Vaya
payments towards premium on health insurance policy
or preventive health check-up or medical expenditure
with respect to senior citizens is proposed to be
increased from `30,000 to `50,000. Further, expenditure
on medical treatment will only be covered where the
concerned senior citizen is not covered under a medical
insurance (insurance cover condition). Presently, only
those who are aged 80 and above are eligible to avail
deduction for medical expenditure, if they are not
covered under medical insurance. This is a good move
and will help those senior citizens who do not have
medical insurance cover. Others would need to evaluate
whether to take the medical insurance cover to buy
protection for major medical expenditure or avail the
deduction for the medical expenditure.
It would have been good to do away with the insurance
cover condition as, presently, medical insurance is
really needed for protection against future medical
expenditure. What they needed was an additional
deduction for the day-to-day medical expenditures, such
as medical tests, physiotherapy and so on.
Deduction for medical treatment: At present,
deduction is available to senior citizens for the medical
treatment of specified diseases (neurological diseases,
hematological disorders etc) to the extent of `60,000
(`80,000 for very senior citizens), subject to certain
conditions. The Finance Minister has proposed to
enhance the limit to `1 lakh for both senior as well as
very senior citizens tax payers.
Deduction for interest from deposits: This year,
the Budget has introduced a deduction of `50,000 on
interest earned by senior citizens from fixed deposits,
recurring deposit and saving bank accounts. Presently,
deduction is available upto `10,000 to all tax payers
including senior citizens in respect to the interest they
earn from saving bank accounts.
The new proposals in the Budget are likely to result in
more savings in taxes for the senior citizens falling under
different income group (Table C).
Simplification and procedural changes:
Vandana Yojana (PMVVY) has been raised from `7.5
E-assessment was tested initially in metro cities on a
lakh to `15 lakh. This scheme offers assured 8 per cent
pilot basis and, thereafter, it was extended to 102 cities.
return on the investments. Hence,
This year, the Budget has proposed
this move will provide an opportunity
the implementation of e-assessment
to the senior citizens to earn assured
across the country. It has been
The Budget also
higher interest by investing more.
proposes to implement proposed to notify a new scheme
this project. This will greatly
e-assessment across for
facilitate the ease of interaction with
Health insurance and medical
the country from the the tax authorities where sometimes
expenditure (Section 80D): The
tax payers fear to visit the tax office
monetary limit for deduction covering
fiscal year 2019
42
Outlook Money February 2018 www.outlookmoney.com