APR Constructions Limited - Saffron Capital

II.TO THE SHAREHOLDERS OF THE COMPANY
These benefits are available to the shareholders of any company after fulfilling certain conditions as required in the
respective Act.
I. Under the Income-tax Act
A. Residents
1. In accordance with section 10(34), dividend income declared, distributed or paid by the company (referred to in
section 115-O) will be exempt from tax.
2. Shares of the company held as capital asset for a period of more than twelve months preceding the date of
transfer will be treated as a long term capital asset. In accordance with section 10(38), any income arising from
the transfer of a long term capital asset being an equity share in a company is not includible in the total income, if
the transaction is subject to securities transaction tax including equity shares Offered for Sale under this issue
which is subject to securities transaction tax at the time of sale.
3. As per the provision of section 71, if there is a loss under the head “Capital Gains”, it cannot be set-off with the
income under any other head. Section 74 provides that the short term capital loss can be set-off against both short
term and long term capital gain. But long term capital loss cannot be set-off against short term capital gain. The
unabsorbed short term and long term capital loss can be carried forward for next eight assessment years and can
be set off against the respective capital gains in subsequent years.
4. In accordance with section 112, the tax on capital gains on transfer of listed shares, where the transaction is not
subject to securities transaction tax, held as long term capital assets will be the lower of:
• 20 per cent (plus education cess) of the capital gains as computed after indexation of the cost. or
• 10 per cent (plus education cess) of the capital gains as computed without indexation.
Provided that in the case of an individual or a Hindu undivided family, being a resident, where the total income
as reduced by such long-term capital gains is below the maximum amount which is not chargeable to income-tax,
then, such long-term capital gains shall be reduced by the amount by which the total income as so reduced falls
short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such longterm
capital gains shall be computed at the above rates of tax.
5. In accordance with section 111A, capital gains arising from the transfer of a short term asset being an equity
share in a company and such transaction is subject to securities transaction tax, the tax payable on the total
income shall be the aggregate of (i) the amount of income-tax calculated on such short term capital gains at the
rate of 15% (plus education cess) and (ii) the amount of income-tax payable on the balance amount of the total
income as if such balance amount were the total income.
Provided that in the case of an individual or a Hindu undivided family, being a resident, where the total income
as reduced by such short-term capital gains is below the maximum amount which is not chargeable to incometax,
then, such short-term capital gains shall be reduced by the amount by which the total income as so reduced
falls short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such
short-term capital gains shall be computed at the rate of ten per cent.
6. In accordance with section 54EC, long-term capital gains arising on transfer of the shares of the company and on
which securities transaction tax is not payable, the tax payable on the capital gains shall be exempt from tax if the
gains are invested within six months from the date of transfer in the purchase of a long-term specified asset. The
long-term specified assets notified for the purpose of investment are bonds of Rural Electrification Corporation
Ltd. (REC) and National Highways Authority of India (NHAI). Investment in these specified assets cannot
exceed Rs.50 lakhs during any financial year.
If only a part of the capital gain is so invested, the exemption would be limited to the amount of the capital gain
so invested.
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