New Delhi: The income tax department has issued a set of frequently asked questions (FAQs) to clear doubts about the long-term capital gains tax levied on shares in the budget, clearly providing that the tax will be levied on shares sold after April 1, 2018. "The new tax regime will be applicable to transfer made on or after 1st April, 2018, the transfer made between 1st February, 2018 and 31st March, 2018 will be eligible for exemption under clause (38) of section 10 of the Act," it said. There had been confusion that the regime will apply to shares sold on or after February 1, the day of the budget. There will be no deduction of tax at source from the payment of long-term capital gains to a resident tax payer.However, tax at the rate of 10% will be deducted from payment of long-term capital gains to a nonresident tax payer except Foreign Institutional Investor (FIIs).In the case of FIIs as well, there will be no tax on gains accrued up to 31st January, 2018. In case of bonus shares acquired before February 1, the gains up to January 31 will be exempt.

Source: Economic Times February 05, 2018 02:03 UTC