Mr. Ramesh, a non-resident Indian acquired/purchased shares of a company XYZ Ltd. in foreign currency on 1st Jan., 2008 for ₹10,00,000. These shares were sold by him in the recognized stock exchange through a broker on 1

The shares purchased in foreign currency in the year 2008 were sold after a period of nine years i.e. in the previous year 2017-18 and thus were held for more than 12 months and accordingly gain on sale of such shares is a long term capital of the specified assets acquired in foreign exchange. Such shares since were purchased by the non-resident Indian in foreign currency and the sale consideration so received was invested within a period of six month in the specified assets being shares, therefore, the gain on sale of shares in the previous year 2017-18 is exempt u/s 115F of the Income Tax Act, 1961. Long Term Capital Gain for AY 2018-19 Particulars Amount (₹) Sale Consideration of Shares of XYZ Ltd. 30,00,000 Less: Cost of Acquisition (10,00,000) Long Term Capital Gain 20,00,000 Less: Exemption u/s 115F (20,00,000) Long Term Capital Gain Nil Long Term Capital Gain "LTCG" for AY 2019-20 LTCG of ₹20,00,000 on the sale of shares purchased in foreign currency by Mr. Ramesh exempt in AY 2018-19 shall become taxable in AY 2019-20 as the shares of ABC Ltd. purchased on 30.03.2018 were sold on 30.06.2018 within a period of three month and were not held as required u/s 115F(2) for a period of three year. Therefore, LTCG of ₹20,00,000 shall be subject to tax in AY 2019-20. The STCG of ₹5,50,000 (₹35,50,000-₹30,00,000) realized on 30.06.2018 shall also be subject to tax in AY 2019-20.