Summary: New Delhi [India], Aug 24 (ANI): In a major relief to foreign portfolio investors (FPI), the government on Friday announced to scrap the enhanced surcharge on long and short-term capital gains
arising from the transfer of equity shares.
As a result, there is a lower tax rate for long-term capital gains as opposed to short-term capital gains
. Short-term capital gains
are taxed at the same rate as ordinary income.
The IRS splits capital gains into two distinct baskets for tax purposes: long- and short-term capital gains
. A short-term capital gain
occurs if you owned the asset for a year or less.
Additionally, the company approved a total capital gain distribution of USD0.7401 per share of its common stock,which consists of short-term capital gains
of USD0.1247 and long-term capital gains of USD0.6154 in accordance with the Corporation's distribution policy.
The Fund makes annual distributions of its realized net long-term capital gains and quarterly cash distributions of all or a portion of its investment company taxable income (which includes ordinary income and net realized short-term capital gains
) to common shareholders.
capital loss adjustment also reduces foreign short-term capital gains
(in the above example by $33.33), here the only concern is with the amount of U.S.
The Netherlands treaty exempts sale of shares of an Indian company by a Dutch-based company if it holds less than 10 per cent shares in the Indian company from short-term capital gains
Following the revised agreement, short-term capital gains
tax will be levied at half the rate prevailing during the first two-year transition period from April 1, 2017 to March 31, 2019.
This "double whammy" is even more pronounced if the fund distributions were short-term capital gains
, which are taxed at an investor's income tax rate rather than the lower long-term capital gains of 15% or 20% for most investors, depending on their tax rate.
As you have sold the bonus shares immediately on receiving them, the profits will be deemed to be short-term capital gains
. As the cost of the bonus shares is treated as nil, the full sale proceeds will be assessable as short-term capital gains
Short-term capital gains
are added to the income and taxed as per the individual's income tax slab.
Detractors will point out that trading costs and taxes are ignored in such calculations, and that the portfolio rejiggering required to hold only top-rated stocks would generate significant commission charges and short-term capital gains