Exemption of long term capital gains on sale of equity shares/ Units of an equity oriented fund [Section 10(38)] :

(i) Section 10(38) exempts long term capital gains on transfer of equity shares of a company or units of an equity oriented fund or units of a business trust.

(ii) This exemption is available only if such transaction is chargeable to securities transaction tax.

(iii) However, such long term capital gains exempt under section 10(38) shall be taken into a account in computing the book profit and income tax payable under section 115JB.

(iv) For the purpose of this clause, “Equity oriented fund” means a fund –

(1) where the investible funds are invested by way of equity shares in domestic companies to the extent of more than 65% of the total proceeds of such fund; and

(2) which has been set up under a scheme of Mutual Fund specified under clause (23D).

(v) The percentage of equity share holding of the fund should be computed with reference to the annual average of the monthly averages of the opening and closing figures.