also when units of equity-oriented funds are sold back to a mutual fund, and has been charged with securities transaction tax in respect of such sale.
If the sale is not effected through a recognised stock exchange then tax @ 10% is levied if the indexation benefit is not availed, and at the rate of 20% if the benefit of indexation is availed.
Clearly, equity investment held for more than 12 months is more tax efficient; in fact, it's tax-free! Such exemption is applicable to bonus shares and right shares also.
Also, since any long term capital gain arising from sale in a recognised stock exchange is tax exempt, while no such concession exists in the case of sale in unrecognised stock exchange, it is obviously wiser to sell your investment through a recognised stock exchange by paying the very small transaction tax.
Tax implications of rights issue ...
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