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) |
|---|---|
| Equity or Preference listed shares, Units of Equity Oriented Mutual Funds | 12 |
| Unlisted shares of Company | 24 |
| Immovable property being land or building | 24 (w.e.f. AY 2018-19) |
| All other Capital Assets | 36 |
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 indexed cost of acquisition from the cost of the capital asset.
LTCG tax is applied at a rate of 20% + surcharge and education cess.
For listed securities, Securities Transaction Tax (STT) is also applicable. In addition, the STCG rate is 15% + surcharge and education cess.
Where STT is not applicable, the capital gain will be added to the yearly income and ordinary income tax rates according to the applicable slab will be computed.
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.
