InvestorQ : How would my STCG tax be calculated if I bought shares at different points of time across a time spectrum?

How would my STCG tax be calculated if I bought shares at different points of time across a time spectrum?

Answer
2 years ago
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Assume that on 10th April 2014, you bought 100 shares of Reliance at Rs.800 per share, and on June 1st 2014 you bought another 100 shares at Rs.820 per share. On the completion of one year on May 1st 2015, you sold 150 shares at 920. Let us first apply the basic FIFO guidelines since there are multiple purchases.

Following the First in First out (FIFO) guidelines, 100 shares bought on 10th April 2014 and 50 shares from the 100 bought on June 1st 2014 should be considered as being sold.

Hence, for shares bought on 10th April 2014 gains = Rs 120 (920-800) x 100 = Rs 12,000/- (LTCG and hence 0 tax). Please note that this pertains to the period before April 2018 and hence we have charged zero tax on LTCG. Post April 2018, the LTCG tax rate is 10% after claiming a basic exemption of Rs.1 lakh.

However, for that shares that were bought on June 1st, Gain = Rs 100 (920-820) x 50 = Rs 5,000/- (STCG and hence 15% tax).

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