Hi, if my income from selling shares, like just after listing in IPOs, is less than 1L in a tax year and I have no other source of income, will I have any tax liability for those gains or just have to file an ITR???
If you earn a capital gain from selling shares, mutual funds, property, or other capital assets, the gain generally needs to be reported in your Income Tax Return. The Income Tax Department defines capital gains as profit or gain arising from the transfer of a capital asset.
How it works
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Identify the asset sold – shares, mutual funds, land/building, etc.
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Calculate the capital gain – broadly, sale consideration minus the applicable cost and eligible expenses.
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Determine STCG or LTCG based on the applicable holding-period rules.
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Report the gain in the relevant ITR schedule, particularly Schedule CG (Capital Gains).
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Apply the applicable tax rate and exemptions/deductions, if eligible.
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Pay any resulting tax liability and complete ITR verification.
For individuals/HUFs without business or professional income, ITR-2 is generally the relevant return when capital gains need to be reported. The department’s current ITR-2 guidance specifically includes Schedule CG for reporting short-term and long-term capital gains/losses.
Documents you may need
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Capital-gain/profit-and-loss statement from your broker
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Purchase and sale details
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Form 26AS
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AIS/TIS
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Bank statements
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Property purchase/sale documents, where applicable
The Income Tax Department specifically recommends keeping a capital-gain transaction summary for shares/securities when filing ITR-2.
Capital gains from the sale of assets should be correctly reported in the appropriate ITR form and Schedule CG. The tax liability depends on the type of asset, holding period, applicable capital gains rate, and eligible exemptions or deductions.