I could see here that long term capital gains tax is applied on overall an year and not on a scrip. So when is this tax applied? - Is it when the amount is transferred from trading account to our bank account? So in the above context not on a scrip means , please let me know if my below understanding is correct?
Buy a stock ‘A’ and hold it for 3 months and sell it. 2. Buy a stock ‘B’ with amount from stock ‘A’ , hold it for 9 months and sell it.
Transfer the amount to bank account, and if the net profit from these two stock is less than 1 lakh , am I applicable for any long term capital gain tax or short term capital gains tax on each stock or the profit is tax free
Tax on Long Term Capital Gains is applicable on the net gains earned at the year end.
It is applicable irrespective of whether you have transferred it to your bank account or not. Tax is payable even if you have re-invested in buying some other shares.
Based the transactions mentioned in point 1, lf you have earned
A] LTCG of less than Rs 1 Lacs - No tax is applicable as LTCG upto Rs 1 Lacs is exempt.
B] LTCG of more than Rs 1 Lacs and you withdrawn the sale proceeds - Tax is applicable on gains exceeding Rs 1 Lac.
C] LTCG of more than Rs 1 Lacs and you have not withdrawn the proceeds - Still, tax is applicable on gains exceeding Rs 1 Lac.
D] Any STCG - Tax is applicable at flat rate of 15%. If your entire income including capital gains is less than 2.5 Lacs - then there is no tax liability.