What are the exemptions available from capital gains tax?
There is no exemption available to short term capital gains arising from sale of shares or securities. LTCG from sale of shares or securities is exempt from tax if the transaction has suffered STT. However if the LTCG is taxable, then exemption is available if the entire capital gain is invested in eligible government bonds, within a period of 6 months from the date of sale of the asset. The money should be invested either in the bonds issued by Rural Electrification Certificate or that issued by National Highways Authority of India. The amount should be invested for a minimum period of 3 years. If the assessee withdraws or avails loan against these bonds within a period of 3 years, then the amount claimed as exemption in the earlier year will be taxed in the year of such utilization.
