Listed shares under section 112A, jewellery with section 54F, a personal computer, a brought forward capital loss, and tax under section 115BAC (as set, 1961 Act, AY 2021-22)

Readings

1. Regime. She opts for section 115BAC (Finance Act, 2020, section 53), so her slab tax is at its Table rates and without the exemptions and Chapter VI-A deductions that section 115BAC(2)(i) lists. Capital gains exemptions under section 54F are not on that list, and the special rate of section 112A still applies. The option counts only if exercised in the prescribed manner: with the section 139(1) return by a person with no business or professional income, or on or before the section 139(1) due date by one who has such income (section 115BAC(5)).
2. Securities tax transaction paid, as printed, is read as securities transaction tax paid on both purchase and sale, the sale being on a recognised stock exchange.
3. The new house (07.12.2021). It is bought after 31.03.2021, within two years of the sale of the jewellery. It is read as bought from proceeds that were either used before she furnished her return or deposited in the capital gains accounts scheme before she furnished it (and in any case not later than the section 139(1) due date), with proof of the deposit sent with the return, as section 54F(4) requires for proceeds not used by then. The figures if the exemption is lost are at the end.
4. Cost Inflation Index for 2004-05. The question gives the index only from 2006-07. The index for 2004-05, the year the jewellery was bought, is taken as 113 (CBDT Notification No. 44/2017 of 5 June 2017 (S.O. 1790(E)), which applies from assessment year 2018-19).

(a) Listed equity shares

The shares were held from 05.10.2016 to 24.03.2021, more than 12 months, so they are long-term (section 2(42A)). Securities transaction tax was paid on both legs, so the gain is taxed under section 112A. For shares bought before 1 February 2018 the cost is the higher of the actual cost and the lower of the fair market value on 31 January 2018 and the sale price (section 55(2)(ac)):

(b) Personal computer

A personal computer used by her is movable property held for personal use, a personal effect. Personal effects are not capital assets (section 2(14)(ii)), so its sale gives no capital gain (or loss). Nil.

(c) Jewellery and the exemption under section 54F

Jewellery is a capital asset even if held for personal use (section 2(14)(ii) excludes it from personal effects). It was held from 05.08.2004 to 12.11.2020, more than 36 months: long-term.

Section 54F: an individual who transfers a long-term capital asset other than a residential house and buys one residential house in India within one year before or two years after the transfer is exempt on the proportion of the gain that the cost of the new house bears to the net consideration. The new house at NOIDA costs ₹22,00,000, the whole net consideration (no expenses were incurred on the sale), so the whole gain of ₹12,73,027 is exempt. She owns no other house, and is taken to buy no other within one year, or build one within three years, after the transfer, so the conditions of the proviso to section 54F(1) are met (the proviso bars the exemption only if the income from such a further house is chargeable under the head Income from house property).

(d) Brought forward long-term capital loss

The loss of ₹2,00,000 from assessment year 2017-18 is read as determined on a return of loss filed under section 139(3). Such a return must be filed within the time allowed by section 139(1); the filing on 23.06.2017 is before the due date of 31st July 2017 (Explanation 2(c) to section 139(1), her accounts not being read as audited). So section 80 does not bar the loss: it may be carried forward and set off only against long-term capital gains, within eight assessment years, that is up to 2025-26 (section 74(1)(b) and (2)). Section 115BAC(2)(ii)(a) bars a brought forward loss only where it is attributable to a deduction listed in clause (i), and clause (ii)(b) only stops a loss under the head Income from house property being set off against another head. This capital loss is neither, so it is set off. The only long-term gain left is on the shares: ₹4,40,000 − ₹2,00,000 = ₹2,40,000.

Total income

Tax liability under section 115BAC

Her income other than the share gain is ₹1,50,000, ₹1,00,000 below the ₹2,50,000 that is not chargeable (section 115BAC(1), Table, Sl. No. 1). For a resident individual the share gain is reduced by that shortfall before the tax of 10% on the gain above ₹1,00,000 (section 112A(2) and its proviso):

Rebate under section 87A: her total income does not exceed ₹5,00,000, but the rebate is allowed only from the tax on total income as reduced by the tax on the section 112A gain (section 112A(6)); that leaves nil, so there is no rebate. No surcharge: total income is below ₹50 lakh (Finance Act, 2021, First Schedule, Part I, Paragraph A).

If the exemption under section 54F is not available

If the proceeds were neither used for the house before she furnished her return nor deposited in the capital gains accounts scheme before furnishing it (and by the section 139(1) due date), the jewellery gain of ₹12,73,027 is taxable at 20% (section 112). The brought forward loss is then better set off against it (20%) than against the share gain (10%): total income ₹16,63,030, and the tax liability ₹2,37,750.