The Income Tax Department has recently updated the capital gains taxation table and this is important information since the rate of capital gains tax both long term (LTCG) and short term (STCG) is different for different asset classes. Do note this tax rate is applicable for individuals under both new and old tax regime, as these are all special rate incomes.“Determination of Tax in certain special cases: Since all the incomes are not taxable at the same rate. The document provides a list of Capital Gains/Incomes arising out of certain securities eligible for special tax rates. It contains details with respect to the eligible assessee, security, or tax rates etc.,” said the Income Tax Department.
Capital gains (LTCG & STCG) income tax rate on equities, others
Here’s the table released by the Income Tax Department:
| Particulars | Section 111A (Short term capital gains STCG) | Section 112A (Long term capital gains LTCG) | Section 115A (royalty and technical service fees) | Section 115AC (Income from bonds or Global Depository Receipts purchased in foreign currency) |
| Eligible Assessee | Any taxpayer | Any taxpayer | Non-Resident (NRI) and Foreign Company taxpayer | Non-Resident (NRIs) |
| Securities covered |
|
| – |
|
| Tax Rate on Income from covered securities | – | – |
|
|
| Tax rate on long-term capital gains (LTCG) | – |
Note: The tax shall be calculated on capital gains exceeding Rs. 1.25 lakh. | – |
|
| Tax rate on short-term capital gains (STCG) |
| – | – | – |
| Adjustment of basic exemption limit | Available to resident individuals and resident HUF only | Available to resident individuals and resident HUF only | No | No |
| Admissibility of deduction under Chapter VI-A | No | No | No, except under Section 80LA to a unit in IFSC and from royalty, and fees for technical services | No |
Source: Income Tax Department WebsiteMihir Tanna, associate director, S.K Patodia LLP says: “Indian Income Tax provisions specified a certain type of income which is not taxable at slab rate but taxable at special rate like sale of equity shares/units of equity mutual funds through recognised stock exchange. While filing ITR For FY 2024-25, taxpayers will pay tax on equity shares/mutual funds based on date of sale, as tax rates are changed from 23rd July 2024. Long term capital gain will be taxed at a higher rate of 12.5% and short term at 20% if it is transferred after 22nd July 2024.”
Tanna highlights that taxpayers should remember that deductions of 80C (like Contribution in PPF, Term plan premium, housing loan principal repayment etc) 80D (mediclaim premium) will not be available as deduction against capital gain even if the old tax regime is opted.
“If resident Individuals and HUF don’t have any other income except above said capital gain then the benefit of basic exemption limit of Rs 3 lakh under new tax regime and Rs 2.5 lakh under old tax regime will be available. Accordingly, capital gains above the exemption limit will be taxable at a special rate as applicable),” says Tanna.
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