If someone aged 64 years earning 12 lakhs form pension and bank interest and another 5 lakhs from trading (3 lakh short term and 2 lakhs from long term gain), can she avail the latest rebate announced on today for income up to 12 lakhs? any advice on this will be big help.
Finance Act 2025 (Budget 2025) will apply to the financial year 2025-26.
Hence, She can’t available.
agreed… let me rephrase the question in different way, say this same set of income she has earned in next FY… how the latest rebate announced on today’s budget can help her… or alternatively she should stop trading in share to get the rebate benefit?
- No rebate allowed against special rate income STCG and LTCG in your case and Total Income more than 1200000₹.
- Yes If she has other than special rate income then allowed.
So, if someone has only interest income of exactly 12L , they would pay 0 tax and if someone else has only interest income of 12L plus one rupee , they would have to pay tax of 60K. Is that correct ?
@RanS
No,
In this case only 1₹ tax liability.
but for given scenario her income from pension and interest is 12 lakhs only, will that not make her eligible for special rebate? and also her age is more than 60 years so will she not get eligible to get 1 lakh exemption?
- No
- Not eligible
Thanks a lot for the help!
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The personal income tax includes a variety of components, including pension income and capital gains. In general, pension income is taxable depending on its source, while capital gains tax applies to profits from the sale of assets such as real estate or stocks. Planning for retirement and investing effectively requires an understanding of these taxes.
Income tax on pensions and capital gains is determined by the tax laws of your country. Pension income is usually taxable, although exemptions or lower rates are sometimes available. Gains from the sale of assets are subject to capital gains tax, which has different rates for short-term and long-term gains. The purpose of tax planning is to minimize liabilities as efficiently as possible.
hi @CA_Anand_Thakor Please advise regarding the information presented in the following article: https://upstox.com/news/personal-finance/tax/exclude-capital-gains-when-calculating-section-87-a-tax-rebate-in-fy-2025-26-says-cbdt/article-164029/. According to this article, new guidelines appear to apply to my situation. Specifically, with pension and interest income below 1.2 million rupees, no tax is levied, while capital gains from share trading are taxed at a special rate. Clarification on this matter would be greatly appreciated. Please help and advise.
Individuals are required to pay income taxes on their wages, pensions, and investment income. Capital gains are generally taxed based on the holding period of the asset, while pensions are generally taxed based on age and income level. It is beneficial for both parties to plan for tax deductions so that their liabilities can be reduced.
Hey @Arindam_Bhattacharya ,
If your total income is below ₹12L, then you are eligible to claim the rebate u/s 87A. But this rebate amount is not available against the tax on special rate income like capital gains or crypto profits.
If the capital gains are taxable at slab rates then you can claim the rebate against that.
Hope this clears your doubt.
f.y. 24-25 . a.y. 25-26
is return filing started on the portal ? i am able to see only till a.y. 24-25 !!!
Hey @HIREiN
Filing for A.Y 2025-26 is expected to begin within 1-2 weeks.
The personal income tax, which includes pensions and capital gains, taxes earnings and investment profits. Pension income is typically taxed based on your income bracket, while capital gains are taxed on the profit made from asset sales. Understanding these taxes helps optimize savings and minimize liabilities for financial planning.
@ solar smash From what I understand, since her total income is ₹17 lakhs—including capital gains—she wouldn’t be eligible for the new rebate announced for income up to ₹12 lakhs. Personally, I think it’s worth consulting a tax advisor to see if there are any deductions or planning options that could help optimize her tax liability.