For this issue, it is better you consult a local tax consultant or an auditor who will be able to guide you properly instead of getting misguided by taking improper advise.
However, for your information, I shall give herein below some tips about it:
The incidence of tax on Capital Gains depends upon the
length for which the capital asset transferred was held before
the transfer. Ordinarily a capital asset held for 36 months or
less is called a ‘short-term capital asset’ and the capital asset
held for more than 36 months is called ‘long-term capital asset’.
Transfer of a short term capital asset gives rise to ‘Short
Term Capital Gains’ (STCG) and transfer of a long term capital
asset gives rise to ‘Long Term Capital Gains’ (LTCG). Identifying
gains as STCG and LTCG is a very important step in computing
the income under the head Capital Gains as method of
computation of gains and tax payable on the gains and
treatment of losses is different for STCG and LTCG.
Short Term Capital Gains (STCG)
Short Term Capital Gains is computed as below:
STCG = Full value of consideration - (Cost of acquisition
+ cost of improvement + cost of transfer
The STCG as arrived above, is taken as income under
Long Term Capital Gains (LTCG)
Long Term Capital Gains is computed as below:
LTCG = Full value of consideration received or accruing
- (indexed cost of acquisition + indexed cost of
improvement + cost of transfer);
For further and full technical details, you may contact an auditor.
