From 01 April 2018, long term capital gains on the sale of listed shares were taxed again in India when gains exceeded which threshold amount as announced in the Union Budget 2018?

Introduction / Context:
This question covers a key change in Indian direct tax policy that came into effect in the financial year 2018 to 2019. In the Union Budget 2018, the government reintroduced a tax on long term capital gains from equity shares and equity oriented mutual funds. Competitive examinations often ask about the threshold amount above which such gains became taxable, because it reflects both tax policy and investment planning considerations.

Given Data / Assumptions:

• The policy change took effect from 01 April 2018.
• The tax applies to long term capital gains on sale of listed equity shares and certain equity oriented funds.
• The question asks at what level of gains the tax starts, that is the exemption limit.
• Four thresholds stated in rupees are provided as options.

Concept / Approach:
Before this change, long term capital gains on certain equity instruments were fully exempt if securities transaction tax was paid. The Budget 2018 introduced a ten percent tax on such gains exceeding a specific annual limit per taxpayer. The widely discussed figure was one lakh rupees of gains, above which the ten percent rate would apply without indexation benefits. Remembering this round number becomes easy because many financial news reports highlighted one lakh as the exemption cap.

Step-by-Step Solution:
Step 1: Focus on phrases long term capital gains, sale of shares, and effective from 01 April 2018. Step 2: Recall that the Finance Minister stated gains exceeding one lakh rupees in a financial year would be taxed at ten percent. Step 3: Look for the option that exactly matches one lakh as the threshold. Step 4: Choose one lakh and reject higher values, because gains up to that amount remained exempt.

Verification / Alternative check:
Verification can be obtained from the text of the Finance Act 2018, official Income Tax Department tutorials, or reliable business newspapers that covered the Budget. They consistently state that long term capital gains exceeding one lakh rupees on eligible equity investments are taxed at ten percent, while gains up to that level in each financial year remain exempt through grandfathering provisions and the threshold.

Why Other Options Are Wrong:
The figures two lakhs, three lakhs, and four lakhs do not match any official exemption level introduced in that Budget. Choosing them would significantly overestimate the tax free limit and could mislead investors. They are present only to test whether candidates remember the correct threshold or simply guess a round number without careful study.

Common Pitfalls:
Candidates often confuse this threshold with limits for other tax provisions, such as basic income tax exemption slabs, Section 80C deductions, or rebate limits. Another common error is to think that the government would choose a higher amount like two or three lakhs to appear more generous. The surest way to avoid these mistakes is to revise Budget highlights from authentic sources and to store a short list of critical numerical limits, including the one lakh long term capital gains threshold introduced in 2018.

Final Answer:
1 lakh