Current context: To encourage investors in the capital market, the government has withdrawn surcharge on tax payable on the transfer of certain assets.
a. The surcharge is levied under the Finance (No. 2) Act, 2019
b. Capital assets under section 111A and section 112A of the income tax Act 1961 are exempted
c. Both a & b
d. None of the above
- The surcharge is levied under the Finance (No. 2) Act, 2019.
- Following capital assets are mentioned in section 111A and section 112A of the income tax Act 1961 which are exempted from levy of the enhanced surcharge.
- Units of a business trust
- Unit of an equity-oriented fund
- Equity shares in a company.
- Only the Foreign Institutional Investors (FPI) derivatives are treated as capital assets and gains from it are subjected to the special rate of tax as per the provision of section 115AD of Act.
- Thus the surcharge on tax payable at a special rate on long-term & short-term capital gains arising from the transfer of equity share shall be withdrawn for both domestic as well as foreign investors.
Question:
Q.1 Choose the correct option in the context of withdrawal of enhanced Surcharge on tax payable on the transfer of certain assets by the Government recently?a. The surcharge is levied under the Finance (No. 2) Act, 2019
b. Capital assets under section 111A and section 112A of the income tax Act 1961 are exempted
c. Both a & b
d. None of the above
