Did you sell a House or Trade in stocks in the past year?
Capital gains may accrue from simple investments in a house property or ordinary shares to hugely complex investments such as financial instruments, Government securities, hedge funds, bonds and so on. Due to procedural complexities, this class of income tax payer requires special treatment.
Plan Description
A capital gain is a profit arising out of the sale of something of value that you own and had bought for speculative purposes. For example, an extra house, shares of a company, jewellery, painting, sculpture or work of art.
Income earned in this way is subject to capital gains tax. Returns on investment may be realized in the short term or long term, in which case, your net gain attracts short-term capital gains tax or long-term capital gains tax.
This plan covers e-filing of income tax returns for salaried individuals with income from capital gains and applicable deductions tied to your investments.
Who is this Plan for?
- Individuals with a Demat account, ESOPs, owners of stocks or other securities, speculative investments in gold, paintings, sculptures, property etc. in order to sell it later and earn a profit are subject to capital gains tax.
- Salaried individuals who additionally earn income from capital gains.
- Holders of bonds except for Special bearer bonds, Zero Coupon bonds, Gold bonds, Gold Deposit bonds and Gold Monetisation scheme, 2015, Deposit certificates.
- SEBI regulated investments made by FIIs
What Do I Get?
Capital gains may accrue from simple investments in a house property or ordinary shares to hugely complex investments such as financial instruments, Government securities, hedge funds, bonds and so on. Sometimes, LTCG tax may require being adjusted by the Cost Inflation Index to inflate the cost of acquisition or making improvements. Short term capital gains tax is taxed at different rates. Further, the holding period of different securities varies unequally.
Due to these and other procedural complexities, this class of income tax payer requires special treatment.
Why Choose Us?
- You get the benefits of comparative advantage obtained through specialization.
- Obtain top-of-the-line tech-enabled tax preparation services from one of the leading government certified e-return intermediaries in the country.
- Unmatched affordability across the industry.
- Highly experienced tax experts dedicated to your success.
How to Proceed?
- Sign up with us or call our Toll-Free number. We’ll create a record of your tax implications.
- Buy one of our subscriptions based on your tax profile.
- Receive a call back from the CA assigned to you.
- Depending on your completed profile you would be asked to submit documents to enable the CA to process your returns, apply deductions, income tax slabs, and tax exemptions or e-file form 10E.
- The tax expert prepares your return, verifies it with you and submits it to the tax department.
FAQ
What income is a Capital Gain?
A capital gain is simply profit obtained from selling a capital asset. So, any income generated in this manner from the sale of such capital asset during the last financial year would be considered a capital gain on your income tax return form. This income would be subject to capital gains tax.
What is a capital asset?
A capital asset, according to Section 2 of the Income Tax Act, 1961, and includes properties held but not in relation to any business or profession carried out by the taxpayer, securities held by a Foreign Institutional Investor under SEBI regulations, shares, G-secs, bonds except for Special bearer bonds, Gold bonds, Gold Deposit bonds and Gold Monetisation scheme, 2015, Deposit certificates.
Excluded from the definition are also stock in trade, consumables in inventory or raw materials to be used in manufacturing or trade.
Note that jewellery, painting, sculpture or other work of art held in speculation would be considered capital assets.
What is the holding period for a long-term capital asset?
| Type of Capital Asset | Holding Period (in months) |
|---|---|
| Listed securities (listed equity or preference shares, listed bonds and debentures), Units of Equity Oriented Mutual Funds, Units of UTI, Zero Coupon Bonds | 12 |
| Unlisted shares of Company | 24 |
| Immovable property being land or building | 24 |
| All other Capital Assets (gold, unlisted bonds, paintings, other movable assets etc.) | 24 |
For transfers on or after 23 July 2024, there are only two holding periods: 12 months for listed securities and units of equity-oriented mutual funds, and 24 months for all other capital assets. The earlier 36-month category no longer applies.
What is the holding period for a Short Term Capital Asset?
Assets with holding periods less than those given above are classified as Short term capital assets.
How are capital gains taxed?
The value of the capital gain is determined by subtracting the cost of acquisition (and cost of improvement, if any) from the sale consideration of the capital asset.
For transfers on or after 23 July 2024, the main current rates are:
- Short-term capital gains on listed equity shares and equity-oriented mutual funds on which STT is paid are taxed at 20% under Section 111A (plus surcharge and cess).
- Long-term capital gains on listed equity shares and equity-oriented mutual funds are taxed at 12.5% under Section 112A on gains exceeding Rs. 1.25 lakh in a financial year (plus surcharge and cess).
- Other long-term capital gains (for example, on property, gold or unlisted shares) are taxed at 12.5% without indexation under Section 112. For land or buildings acquired before 23 July 2024, resident individuals and HUFs can pay the lower of 12.5% without indexation or 20% with indexation.
- Crypto and other Virtual Digital Assets (VDAs) are taxed at a flat 30% under Section 115BBH, with no deduction other than the cost of acquisition and no set-off of losses.
Short-term gains on assets not covered by Section 111A are taxed at your applicable slab rates for the current assessment year.
Is there any relief on delayed income due to be received in the current Financial Year?
Section 89(1) allows salary arrears or advances to be relieved of current tax rates (which may have risen since the income was earned) when being assessed for tax returns in the relevant Assessment Year.
Rule 21A of the Income Tax Rules enactment provides directions on how to apply this relief.
Form 10E is used to claim relief under section 89(1).
What is Form 10E?
Form 10E is used to claim relief under section 89(1).
It is compulsory to e-file Form 10E on the income tax India login portal. You may not receive relief under Section 89(1) for salary arrears or advances otherwise.
Taxes are adjusted assuming that they were pending in the year in which they were accrued.
