You might have made some investment this year, which might yield you in the coming years. Or you might be getting off, of your past investment finding it to be no more rewarding in the current year. But is it so easy to escape, when you have invested for long term or gained some benefits out of your investment in its initial years? No, there’s huge compliance involved in admitting and withdrawing out of investments.
The Income Tax Act, 1961 guides for applicability of a Capital Gain tax, where any investor
though holding any investment including any movable or immovable property
receives any gain or profit out it during its holding period, at its resale, or
at its maturity as the case may be. Capital gain tax is charged on the profits
and gains realized by the investor on certain investments which the investor
has to submit to the Income-tax department.
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Online ITR Filing in India , it is necessary to take care of reporting of
profits and gains realized in the current year from past investments or fresh
investments in the Income-tax return . As per Section 2 of the Income-tax Act
1961 , Capital gains include profit or gains received from transfer of capital
asset.
Held for not more than 12 months are treated as short term capital assets.
Held for more than 12 months are treated as long term capital assets.
Short Term Capital Gain : Capital Gains arising out of transfer of Short term Capital Asset like listed securities , zero coupon bonds, unlisted shares or immovable property held for not more than 12/ 24 months etc.
Long Term
Capital Gain: Capital Gains arising out of the transfer of Long term Capital
Asset like listed securities, zero-coupon bonds, unlisted shares, or immovable
property all held for more than 12 /24 / 36 months as depending on the class of
investment.
Tax Rate on Capital Gains
|
Tax Section |
Gains |
Rate |
Exceptions |
|
Section 111A |
Short
Term Capital Gain from Securities (where Security Transaction Tax is
applicable ) |
15% |
Securities >Held
as stock in trade >STT
is not applicable >Held
by FII (Foreign Institutional Investors ) |
|
Section 111A |
Short
Term Capital Gain from Securities (where Security Transaction Tax is not
applicable ) |
As per
tax slab rate of the taxpayer |
N/A |
|
Section 112 |
Long
Term Capital Gain from Securities (Applicable on all securities whether
listed or not ) |
20% |
>
Gains from Mutual funds. >
Not applicable on NRIs |
|
Section 112A |
Long
Term Capital Gain from Securities (Applicable on gains received for more than
Rs 1 lakh and on all securities whether listed or not ) |
10% |
>
Gains from Mutual funds. >
Not applicable on NRIs. > Securities
on which STT is not charged >
Securities held as stock in Trade >
Securities held by FII. |
|
Computation of Short Term Capital Gain |
Computation of Long Term Capital Gain |
||
|
Full
Consideration Value / Realised Value |
XXXXX |
Full
Consideration Value / Realised Value |
XXXXX |
|
Less : Cost of Acquisition |
(XXXXX) |
Less : Indexed Cost * of
Acquisition |
(XXXXX) |
|
Less : Cost of Improvement (if
any) |
(XXXXX) |
Less : Indexed Cost of
Improvement (if any) |
(XXXXX) |
|
Less : Expenses incurred for
Sale of Asset |
(XXXXX) |
Less : Expenses incurred for
Sale of Asset |
(XXXXX) |
|
STCG |
XXXXX |
Less : Exemptions and
Deductions (Section 54 etc) |
(XXXXX) |
|
|
|
LTCG |
XXXXX |
Indexed Cost of Acquisition : Cost of Acquisition X Cost inflation Index of the year of Acquisition
Indexed Cost of Improvement : Cost of Improvement X Cost inflation Index of the year in which Improvements made.
|
Exemptions |
|
|
Section 54 |
No
Capital gain on Sale of Residential property if new residential property is
purchased & held for at-least 3 years after purchase or construction. |
|
Section 54B |
No
Capital gain shall be charged if any long term asset is sold to purchase
Agricultural land and is held for at least 3 years |
|
Section 54F |
No
Capital gain shall be charged if new Residential property is purchased from
Sale of long term capital asset |
|
Section 54GB |
No
Capital gain shall be charged if any long term asset is sold to buy shares of
an eligible company as provided under the section. |
|
Section 54D |
No
Capital gain shall be charged if any long term asset is sold to buy building
or land for industrial undertaking |
|
Section 54EC |
No Capital
gain shall be charged if any long term asset is sold to buy bonds redeemable
after 5 years . |
|
Section 54G |
No
Capital gain shall be charged if any long term asset is sold to buy any plant
or machinery , any undertaking or setup SEZ in any rural area . |
|
Section 54EE |
No
Capital gain shall be charged if any long term asset is sold to buy
securities or funds notified by Central Government. |
