Budget 2023: 'Expect clarity on some taxes related to capital gains'4 min read . Updated: 31 Jan 2023, 08:36 PM IST
- It is expected that Budget 2023 will bring in a necessary amendment in the explanation to section 55(2)(ac) by expanding the definition of ‘FMV’
The Finance Act 2018 brought a paradigm shift in the taxation of Long-term Capital Assets (LTCA)- being equity shares by the withdrawal of tax exemption of Long-term Capital Gains (LTCG) on the transfer of such shares and by inserting section 112A along with clause (ac) to section 55(2) to the Income-tax Act, 1961 (the Act) to determine capital gains income for shares acquired before 1 February 2018. Notably, such clause (ac) contains an Explanation, having an exhaustive definition of Fair Market Value (FMV), which is imperative to arrive at the Cost Of Acquisition (COA) of such LTCA, as defined in section 112A of the Act.
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