STCG and LTCG Taxation

Income Tax Income from Capital Gains
8

Hi Team,

I am a salaried person and I do have some short term equity trading gains also.
My income from

  1. salary and fixed deposits is 10 Lacs (after deducting all 80 c, 80 D related investments) and
  2. income from short term equity capital gains is around 1 lac.

Before filing ITR, I need to understand, how I will be taxed in old tax regime.

  1. Will the income of 1 lac from short term equity trading be added in the income from salary as a whole and thus total taxable income be like 11 lacs and then the tax slab rates will be applied?

or

  1. Will the income of 1 lac from short term equity trading be taxed separately at 15 % and then the remaining amount of 1 lac - 15K = 85K be added in the income from salary? e.g. in my case now my total income after the short term capital gain tax will be 10 lac 85K and now I need to pay taxes as per applicable tax slabs.
    If this is the case then am I not being taxed twice on the income from short term equity trading?

Thanks in advance for your response.

Thanks,
Vikash

9

Hey @click2vikash

Here’s how you’ll be taxed under the Old Regime:

Total Income = 11 lacs
Income Taxable at Slab rates = 10 lacs
Income Taxable at Specified rates = 1 lakh

Tax on Slab Rate Income = 1,12,500
Tax on STCG = 15,000

Total Income Tax = 1,27,500
HEC = 5100
Total Tax Liability = 1,32,600

Hope this helps :slight_smile:

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10

Thanks @vinith.r for confirming !

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11

I bought shares worth INR 70,000 in 2017 which are now worth around INR 1,80,000. It is long term capital gains, how much tax do I have to pay?

12

To differentiate capital gains into long term and short term the period is 36 months and 12 months - which one to consider?

13

Hey @Tanmay_mehta,

In Budget 2018, the grandfathering rule was announced u/s 112A which implies that - long term capital gains above INR 1 Lakh will be taxed at 10% after 1st Feb 2018.
Therefore to calculate LTCG:

  • Take the equity value as on 31st Jan 2018 to be X
  • so LTCG = Sales price - value as on 31st Jan 2018
  • LTCG = 1,80,000 - X

Any tax on LTCG will be 10% above INR 1 Lakh

  • LTCG below INR 1 Lakh is fully exempt
  • LTCG above INR 1 Lakh will be taxable at 10% for the amount above INR 1 Lakh only.

Hope this helps!

Refer to our learn article on LTCG on sale of Equity Shares and Equity Mutual funds

14

Hey Kunal,

For capital assets like Equity & preference share, Debentures & Government securities, Units of UTI and equity-oriented mutual funds and Zero-Coupon Bonds where STT is paid

  • If such assets are sold within 12 months of purchase, it is considered short term capital gains
  • If assets are held for more than 12 months, it is considered long term capital gains

However, the holding period is 36 months for other capital assets like house property, machinery, vehicles, etc

You can refer to Capital Gains guide on our learn center.

15

Hi @Ridhima_Sharma @TeamQuicko

I bought 500 shares at 100 rupees each on May 05, 2020, thereby investing 50,000 in a company. When the share price appreciated to Rs. 200 each, I sold 250 shares on Feb 15, 2021, thereby taking my initial investment of 50k.

As I have ONLY taken my initial investment out & not profit, will I be taxable under STCG ?

Pl advise

16

Hey @Abdul_Kaleem_shah, yes, you will have to file ITR 2 as the income you have received from selling the shares is considered as capital gains income and since you have sold it before holding them for 12 months it will be considered as STCG. You can read more about capital gains from here:

17

thanx @Maharshi_Shah for prompt response.

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18

Hi,
My LTCG on mutual fund are to tune of 60k. However while filling the ITR2, it is asking the qtrly value to be be filled . Where can i get the quarterly gain earned to fill in ?

19

Hi @Yantra_74
Quarterly Break up of Capital Gains is required while filing ITR 2. You need to enter the Gains in the quarter when you sold the mutual funds and Gains were realized.

20

Received the loss/gain details in consolidated statement Summary from CAMS. But they are not adding up to the actual LTCG value. Ihave losses and gains too. So am now confused how to match to the value.

Can i randomly put any value in each of those 5 quarters, however ensuring the sum of all qtrs add up to actual LTCG value ?

21

Hi @Yantra_74

You need to get the transaction statement from CAMS where you can get the dates of the transaction done and thus you will get the profit/loss for each quarter (Net gain/Loss) and the total of each quarter should match to total LTCG of the year.

22

Thank you… already tried that, but somehow values are not matching up. will recheck again. Which column to be considered, ltcg with indexation or without ? Pls confirm.

23

Hey @Yantra_74, you will have to consider the column with no indexation benefit.

24

Thank you, shall try on the suggested lines.

25

If my Long term capital gains is below 1Lakh in a year, do I need to file ITR2 or I can just file ITR1 as usual (simple salaried with some interests). I read in few places, only over 1Lakh LTCG I’m liable to pay 10% taxes.

My Scenario: I have few old shares, which are very good priced at the current bull market. Now if I sell them, I might make a bit profit. But my investment is so low, I don’t want to take the headache by going into ITR2 for the next 8 years. I have no intraday or short term share trades. Maybe the overall gain will be just a mere 3-4 thousands (even amount to withdraw is just 14k or so).

26

Hey @sajalb, it is required that you file ITR 2 since you need to disclose the source of the income even though your profits are not taxable. Also, you do not have to file ITR 2 for 8 years in order to keep carry forwarding your losses.

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27

Thanks for the prompt reply. I understand it now. I hope I can cope up with the ITR2, feel very daunting to leave the comfort of ITR1.

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