Hi all,
I bought 100 stocks of Coal India in 2021 and in order to average it i bought stocks in 2022 and 2023. If I want to sell 50 stocks of coal India,will i need to pay capital gain tax since i have bought the recent one only 6 months back
Hi @jishnu_m
Investments where the holding period is more than 1 year will attract LTCG.
FIFO is mandated to be used to report profit and loss (P&L) while filing income tax returns. So, if you sell 50 qty, it will be taken from the 100 qty you bought in 2021, and since, LTCG has an exemption till 1 lac per financial year, there won’t be any tax applicable to you.
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Hey @jishnu_m,
The tax P&L is calculated on a FIFO(first in first out) basis i.e. the shares that were bought in 2021 will be sold first. Moreover, as they were held for more than 12 months, LTCG will arise.
LTCG of up to Rs. 1 Lakh are exempt, hence, the tax will be applicable on gains above Rs. 1Lakh.
Hope this helps!