Taxability of Long-Term Capital Gains

When you sell certain assets that you have held for a long period, the profit you make is considered a long-term capital gain. This gain is subject to specific tax rules.

The question asks about the tax percentage on long-term capital gain arising from the transfer of securities, bonds, units, and debentures. These assets fall under specific categories for taxation purposes.

Tax Rate on Long-Term Capital Gains from Specified Assets

For long-term capital gains arising from the transfer of:

• Listed equity shares
• Units of an equity-oriented mutual fund
• Units of a business trust

where Securities Transaction Tax (STT) has been paid on acquisition and transfer, the tax rate is 10 percent on the gains exceeding ₹1 lakh in a financial year. This is covered under Section 112A of the Income Tax Act.

For other long-term capital assets, including certain bonds, debentures, and unlisted securities, the tax rate is generally 20 percent with the benefit of indexation, as per Section 112. However, some specific types of bonds (like tax-free infrastructure bonds) may have different treatments or exemptions.

Given the options and the common context related to listed securities, the 10 percent rate is applicable for long-term capital gains exceeding the threshold from the transfer of listed securities, units, etc., where STT is paid. This is a preferential rate for encouraging investment in the stock market.

Therefore, based on the assets specified and the common tax provisions for such assets, the taxable percentage on long-term capital gain is 10 percent for specific cases covered under Section 112A.