Long-term capital gains on listed equity shares (STT paid on acquisition and transfer) are taxable under section 112A at 12.5 per cent only on the amount of such gains exceeding:
ARs 1,00,000
BRs 1,25,000
CRs 1,50,000
DRs 2,00,000
Answer & Solution
Correct answer: B. Rs 1,25,000
1. Section 112A applies to LTCG on listed equity shares (STT on both acquisition and transfer) and on units of equity-oriented funds/business trusts (STT on transfer).
2. The section carves out a threshold: only LTCG exceeding Rs 1,25,000 in the year is taxed.
3. The excess over Rs 1,25,000 is taxed at 12.5%; gains up to the threshold bear no tax.
_Source: ICAI CA Inter P3(A) Income-tax SM (May 2026), Ch 3 Unit 4 Capital Gains, PDF p. 82_
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