How to compute short term capital gains?
Short term capital gain is simply calculated as difference between (Sale price – purchase cost including any expenses incurred for acquiring these shares). It will be included in the computation of tax along with other heads of income under the head “Capital gains”. Depending on the slab of the tax rate under which you fall based on your total taxableincome, tax rate will be appliedon these gains. In case there is a short term loss it will not be included in the computation but rules for set off and carry forward will apply. See set off and carry forward of capital gains in question no….(ISEC to provide link to the question). Example: You purchased 5000 shares of ACC on 21.5.2003 at an average price of Rs 155/- per share and sold them on 18.11.2003 at a price of Rs 165/-. This sale of capital asset will be treated as short term asset and will be subject to short term capital gains.
