Self assessment Tax

Income Tax Income from Capital Gains
1

Hello Together,

I have made some capital gain. Iam also salaried for which my company already paid tax. But for capital gain i couldnot pay advance tax. So what is suggested now to reduce the fine. Shall I pay self assessment tax now or in month of July during itr filing. Will giving self assessment tax now reduce interest on tax ??Also how can I calculate accurate tax amount??kindly help.

Also additional question I made some losses in options trading 70k. Will audit be required??

Can I offset my short term or long term capital gains against option losses??

Regards
Gitesh

2

Hey @Gitesh

  1. Your salary taxes are already deducted via TDS. But since you’ve earned capital gains and didn’t pay advance tax, you might be liable for interest under Sections 234B & 234C of the Income Tax Act.
    So yes, if you pay the taxes on your capital gains in April, you will be able to save the interest charged u/s 234B compared to waiting till ITR filing in July.

  2. If your total turnover from trading is more than ₹10 crore then audit is mandatory.

  3. Option trading losses can be set off against both short-term and long-term capital gains.

Hope this helps!

1 Like
3

Got it! So if I pay the capital gains tax now, how much interest can I actually save compared to waiting until July?

4

Hey @sunanba2

Under Section 234B, interest is charged at 1% per month (or part of a month) from 1st April until the date of actual tax payment, if advance tax wasn’t paid as required. However, this interest is not applicable if at least 90% of the total tax liability has already been paid as advance tax.

Section 234C, on the other hand, applies when there is a delay or shortfall in payment of advance tax instalments as per the prescribed due dates.

Hope this helps!

1 Like
5

@Ayushi_Joshi : Thanks for the clarification.Really helpful. Another question on point no 3. If I have taken some courses for equity or option trading. Can I also offset those course fees expenses with short term capital gains ??

6

Hey @Gitesh

You cannot claim course fees as an expense against short-term or long-term capital gains if you’re treating your gains/losses under the capital gains head. However, if you’re involved in F&O or intraday trading, which is classified as business income, then such course fees can be claimed as a business expense.

Hope this helps!

7

Yes thanks a lot for all the details