Long term capital gains tax sop for IPOs

Applicable even if STT not paid earlier
Initial public offerings, bonus, rights issues and ESoPs will be eligible for concessional rate of 10% long-term capital gains (LTCG) tax even if the Securities Transaction Tax (STT) has not been paid earlier. In the recent Budget, the government had, after a gap of 14 years, reintroduced concessional 10% on LTCG tax exceeding Rs. 1 lakh from sale of shares, subject to payment of STT at the time of acquiring the equities. The Finance Ministry also decided to exempt certain transactions from payment of STT for availing the concessional 10% LTCG rate. The Ministry has notified a list of carve outs which will be exempt from the requirement of paying STT. These include IPO, follow-on public offer (FPO), bonus or rights issue by a listed company, acquisition approved by Court/NCLT/SEBI/RBI and acquisition pursuant to exercise of ESOPs. Also the off-market transactions undertaken by non-residents in line with FDI guidelines, qualified institutional buyers, venture capitalist without payment of STT too could avail the 10% LTCG rate. Prior to April 2018, the LTCG tax was nil for shares sold after a year of purchase. In case the STT has not been paid and the transactions are not in the exempt list, the usual LTCG tax rate of 20% would apply of sale of shares.
Source :  https://www.thehindu.com/todays-paper/tp-business/long-term-capital-gains-tax-sop-for-ipos/article25152208.ece

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