Capital Gain Tax on Shares in India (FY 2024-25): Rates, Calculation & Filing
- Rajesh Kumar Kar
- Jul 22
- 21 min read
What is Capital Gains Tax on Shares in India?
Capital gain tax on shares is a tax you pay on the profit you make from selling shares. When you invest in the stock market and sell your shares for more than you bought them, you earn a profit; this profit is what's known as a capital gain. These capital gains are profits from selling a 'capital asset'. Shares, especially equity shares, are considered capital assets. The Income Tax Act, 1961, states that this income from shares tax falls under the 'Capital Gains' category. Understanding this share market tax India is very important for all investors. If you've made a profit on your stock investments, it's crucial to understand the tax you need to pay. The rules for what is capital gains tax have seen some big changes, particularly with Budget 2024, which will affect the financial year 2024-25 (Assessment Year 2025-26). For assistance with Indian tax laws, TaxBuddy possesses considerable expertise. It's always a good idea to consult the Income Tax Department for the latest regulations or to understand your basic income tax rules.
Table of Content
Short-Term Capital Gains (STCG) Tax on Shares: Rates & Calculation (FY 2024-25)
Long-Term Capital Gains (LTCG) Tax on Shares: Rates, Exemption & Calculation (FY 2024-25)
Calculate Your Capital Gains Tax on Shares (India) - FY 2024-25
Tax on Unlisted Shares, Bonus Shares, Rights Issues, and Gifts
How to Save Capital Gains Tax on Shares: Exemptions & Strategies
How to Report Capital Gains from Shares in Your ITR (AY 2025-26)
Short-Term vs. Long-Term Capital Gains on Shares
Short term capital gains on sharesand long term capital gains on shares are the two main types of profits you can make, and they are taxed differently. The key difference between Short-Term Capital Gains (STCG) and Long-Term Capital Gains (LTCG) depends on the holding period of your listed equity shares and equity-oriented mutual funds. This holding period for capital gains is simply how long you owned the shares before selling them. This duration is super important because it decides the STCG vs LTCG tax treatment your profits will receive.
For listed equity shares and equity-oriented mutual funds, if you sell them after holding them for 12 months or less, the profit is an STCG. If you hold them for more than 12 months, the profit becomes an LTCG. Knowing whether your gain is short-term or long-term is the first step to figuring out your tax. TaxBuddy offers guides on investment basics and different types of mutual funds, including equity-oriented mutual funds.
Here's a simple way to look at the holding periods:
Asset Type | Holding Period for STCG | Holding Period for LTCG |
Listed Equity Shares | ≤12 months | >12 months |
Equity-Oriented Mutual Funds | ≤12 months | >12 months |
Short-Term Capital Gains (STCG) Tax on Shares: Rates & Calculation (FY 2024-25)
STCG tax rate on shares 2024-25 is a key figure for investors who trade frequently. Short-Term Capital Gains (STCG) on shares arise when you sell listed equity shares or units of an equity-oriented mutual fund within 12 months of acquiring them. The tax on shares sold within 1year India is primarily governed by Section 111A of the Income Tax Act, especially if Securities Transaction Tax (STT) was paid on the sale. When you calculate STCG on shares, you look at the Gross Sale Consideration (what you sold them for) and subtract the Cost of Acquisition (what you bought them for) and any Expenses on Sale (like brokerage). The resulting profit is then taxed at the applicable Tax Rate, plus any Surcharge and Cess. It's important to note that Budget 2024 brought changes to these rates.
What is the Holding Period for STCG on Shares?
The STCG holding period shares is quite straightforward for many common investments. For listed equity shares and also for short term holding period equity mutual funds, if you hold them for a period of 12 months or less before selling, any profit you make is classified as a Short-Term Capital Gain (STCG). This means if you buy shares on January 1, 2024, and sell them on or before January 1, 2025, your gain will be short-term.
STCG Tax Rate on Listed Shares (STT Paid) - AY 2025-26
The STCG tax rate Section 111A applies when Securities Transaction Tax (STT) has been paid on the sale of listed equity shares or equity-oriented fund units. The share tax rate India short term has been revised by Budget 2024 STCG changes. For transfers made:
Before July 23, 2024: The STCG tax rate is 15% (plus applicable surcharge and cess).
On or after July 23, 2024: The STCG tax rate is 20% (plus applicable surcharge and cess).
Here's a table for clarity:
Transaction Date | Applicable STCG Rate (STT Paid) |
Before July 23, 2024 | 15% + Surcharge & Cess |
On or after July 23, 2024 | 20% + Surcharge & Cess |
Step-by-Step: Calculating STCG on Shares
To calculate STCG on shares example, you need a clear formula. The STCG calculation formula India is:
STCG = Full Value of Consideration – (Cost of Acquisition + Cost of Improvement + Expenses incurred wholly and exclusively in connection with such transfer)
Let's break this down with an example: Suppose an investor, Priya, bought 100 shares of ABC Ltd. on March 1, 2024, at Rs. 200 per share. Her total Cost of Acquisition is 100 Rs. 200 = Rs. 20,000. She sold these 100 shares on August 15, 2024, at Rs. 250 per share. So, her Full Value of Consideration is 100 Rs. 250 = Rs. 25,000. She paid a brokerage of Rs. 100 on the sale (Expenses on transfer). Her Cost of Improvement is Nil in this case.
Priya's STCG would be: STCG = Rs. 25,000 – (Rs. 20,000 + 0 + Rs. 100) STCG = Rs. 25,000 – Rs. 20,100 STCG = Rs. 4,900
Since Priya sold the shares on August 15, 2024 (which is on or after July 23, 2024) and assuming STT was paid, her tax liability on this gain would be 20% of Rs. 4,900, plus applicable surcharge and cess. Tax = 20% of Rs. 4,900 = Rs. 980 (excluding surcharge and cess).
Long-Term Capital Gains (LTCG) Tax on Shares: Rates, Exemption & Calculation (FY 2024-25)
The LTCG tax rate on shares 2024-25 is a crucial aspect for investors holding shares for more than a year. When you calculate LTCG on shares, the rules under Section 112A of the Income Tax Act become very important, especially for listed equity shares where STT is paid. This section also includes an LTCG exemption limit, meaning a certain amount of your long-term gain is not taxed. For shares bought a long time ago, specifically on or before January 31, 2018, a special Grandfathering Clause affects how you calculate the cost, using the Fair Market Value (FMV) as of that date. The tax on shares sold after 1 year India is generally 10% or 12.5% on gains above the exemption limit, plus applicable Surcharge and Cess, without the benefit of indexation for these specific shares. Budget 2024 also brought significant updates to these rates and exemption limits, effective from July 23, 2024.
What is the Holding Period for LTCG on Shares?
The LTCG holding period shares is the duration you must hold your investments to qualify for long-term tax treatment. For listed equity shares and long term holding period equity oriented mutual funds, if you hold them for more than 12 months before selling, any profit you make is considered a Long-Term Capital Gain (LTCG). This means if you sell shares more than one year after you bought them, the resulting profit is an LTCG.
LTCG Tax Rate & Exemption (Sec 112A) on Listed Shares - AY 2025-26
The LTCG tax rate Section 112A applies to long-term capital gains from the sale of listed equity shares or units of equity-oriented mutual funds, provided Securities Transaction Tax (STT) has been paid on both acquisition (for shares, as applicable) and transfer. The Budget 2024 LTCG changes have updated both the tax rates and the LTCG exemption Rs 1.25 lakh (previously Rs 1 lakh). The share tax rate India long term under Section 112A does not allow for indexation benefits.
Here's how it works for FY 2024-25 (AY 2025-26):
For transfers made before July 23, 2024: A tax rate of 10% applies to gains exceeding Rs. 1 lakh.
For transfers made on or after July 23, 2024: A tax rate of 12.5% applies to gains exceeding Rs. 1.25 lakh. Surcharge and cess will be applicable on the tax amount.
Here's a table for quick reference:
Transaction Date | Exemption Limit | Applicable LTCG Rate (STT Paid, Sec 112A) |
Before July 23, 2024 | Rs. 1,00,000 | 10% on gains exceeding Rs. 1 lakh |
On or after July 23, 2024 | Rs. 1,25,000 | 12.5% on gains exceeding Rs. 1.25 lakh |
Understanding the Grandfathering Clause for LTCG
The grandfathering clause capital gains under Section 112A is a special provision for LTCG shares before 2018. If you acquired listed equity shares on or before January 31, 2018, this rule helps determine your Cost of Acquisition (COA) to ensure that gains accrued up to that date are not unfairly taxed. The FMV for capital gains as of January 31, 2018, plays a key role here.
To calculate the COA for such shares, you need to consider these steps:
Find the actual cost of acquiring the share.
Find the Fair Market Value (FMV) of the share as of January 31, 2018. (This is usually the highest price traded on the stock exchange on that day).
Find the full value of consideration (sale price) of the share.
The Cost of Acquisition will be the higher of: a. Your actual cost of acquisition. b. The lower of: i. FMV as of January 31, 2018. ii. Full value of consideration (sale price).
However, if the full value of consideration is lower than the FMV as on 31.01.2018, then the Cost of Acquisition shall be higher of actual cost and full value of consideration. This aims to ensure that if the share price fell after Jan 31, 2018, you don't pay tax on notional gains.
Example: Ravi bought 100 shares of X Ltd. in 2015 for Rs. 150 per share (Actual COA = Rs. 15,000). The FMV of X Ltd. shares on Jan 31, 2018, was Rs. 250 per share (Total FMV = Rs. 25,000). Ravi sold these shares on September 10, 2024, for Rs. 300 per share (Sale Price = Rs. 30,000).
Let's determine the COA per share: Actual Cost = Rs. 150 FMV (Jan 31, 2018) = Rs. 250 Sale Price = Rs. 300
Lower of FMV (Rs. 250) and Sale Price (Rs. 300) is Rs. 250. COA is higher of Actual Cost (Rs. 150) and Rs. 250. So, COA is Rs. 250 per share. Total COA = 100 * Rs. 250 = Rs. 25,000. LTCG = Rs. 30,000 (Sale) - Rs. 25,000 (COA) = Rs. 5,000.
Step-by-Step: Calculating LTCG on Shares (with Grandfathering if Applicable)
To calculate LTCG on shares example India, the LTCG calculation formula is:
LTCG = Full Value of Consideration – (Cost of Acquisition [adjusted for grandfathering if applicable] + Cost of Improvement + Expenses incurred wholly and exclusively in connection with such transfer)
Let's see two examples:
Example 1: Shares bought AFTER January 31, 2018 Sunita bought 200 shares of Y Ltd. on March 15, 2022, for Rs. 400 per share. Cost of Acquisition = 200 Rs. 400 = Rs. 80,000. She sold these shares on August 30, 2024, for Rs. 550 per share. Full Value of Consideration = 200 Rs. 550 = Rs. 1,10,000. Brokerage paid on sale = Rs. 200. Cost of Improvement = Nil.
LTCG = Rs. 1,10,000 – (Rs. 80,000 + 0 + Rs. 200) LTCG = Rs. 1,10,000 – Rs. 80,200 LTCG = Rs. 29,800
Since the sale is on August 30, 2024, the exemption is Rs. 1.25 lakh. As Rs. 29,800 is less than Rs. 1.25 lakh, no tax is payable on this gain, assuming this is her only LTCG under Sec 112A for the year.
Example 2: Shares bought ON OR BEFORE January 31, 2018 (Grandfathering applies) Anil bought 100 shares of Z Corp on January 10, 2017, at Rs. 1,000 per share (Actual Cost = Rs. 1,00,000). The FMV of Z Corp shares on January 31, 2018, was Rs. 1,200 per share. Anil sold these shares on September 5, 2024, for Rs. 1,800 per share (Sale Value = Rs. 1,80,000). Brokerage paid on sale = Rs. 500.
Calculate Cost of Acquisition (COA) per share using grandfathering: Actual Cost = Rs. 1,000. FMV (Jan 31, 2018) = Rs. 1,200. Sale Price = Rs. 1,800.
Lower of FMV (Rs. 1,200) and Sale Price (Rs. 1,800) is Rs. 1,200. The COA is the higher of Actual Cost (Rs. 1,000) and Rs. 1,200. So, COA per share is Rs. 1,200. Total COA = 100 * Rs. 1,200 = Rs. 1,20,000.
LTCG = Rs. 1,80,000 (Sale) – (Rs. 1,20,000 (COA) + 0 (Improvement) + Rs. 500 (Expenses)) LTCG = Rs. 1,80,000 – Rs. 1,20,500 LTCG = Rs. 59,500.
Since the sale is on September 5, 2024, the exemption is Rs. 1.25 lakh. As Rs. 59,500 is less than Rs. 1.25 lakh, no tax is payable, assuming this is his only LTCG under Sec 112A. If he had gains over Rs. 1.25 lakh, the excess would be taxed at 12.5%.
Calculate Your Capital Gains Tax on Shares (India) - FY 2024-25
This section would ideally feature an interactivecapital gains tax calculator shares India. Such a Calculator allows users to input their specific trade details to get an estimate of their Tax Liability. The input fields would typically include: Type of Gain (STCG/LTCG - which could be auto-determined by buy and sell dates or selected manually), Buy Date, Sell Date, Buy Price per Share, Sell Price per Share, Number of Shares, and any Brokerage/Expenses. For LTCG on shares bought before Jan 31, 2018, an input for FMV as of Jan 31, 2018, would be necessary. The STCG LTCG calculator or share profit tax calculator should then output the estimated capital gain and the tax payable, automatically considering the new rates (15%/20% for STCG, 10%/12.5% for LTCG) and exemption limits (Rs 1 lakh/Rs 1.25 lakh for LTCG) based on the transaction date (pre/post July 23, 2024).
Tax on Unlisted Shares, Bonus Shares, Rights Issues, and Gifts
Capital gains on unlisted shares India and other special situations like receiving bonus shares or shares as gifts have distinct tax rules. Beyond simple trading of listed equity shares, investors often encounter scenarios involving tax on bonus shares, tax on rights issues, capital gains on gifted shares, or even shares received through ESOP taxation India. It's important to understand how gains from Unlisted Shares, Bonus Shares, Rights Issues, ESOPs, Gifted Shares, and Inherited Shares are treated for tax purposes. Some debt mutual funds also have specific rules, though this article focuses primarily on equity. These areas can be complex, so accuracy is key.
Taxation of Unlisted Shares (STCG & LTCG)
The unlisted shares capital gains tax rate differs from listed shares. For unlisted shares, the holding period to determine if a gain is short-term or long-term is 24 months. If you hold unlisted shares for 24 months or less, the gain is Short-Term Capital Gain (STCG). This STCG unlisted shares slab rate means the profit is added to your total income and taxed according to your applicable income tax slab. If you hold unlisted shares for more than 24 months, the gain is Long-Term Capital Gain (LTCG). For FY 2024-25, LTCG on unlisted shares has seen changes. Historically, it was often 20% with indexation benefits. As per recent updates, for transactions on or after July 23, 2024, the LTCG rate for many assets, including potentially unlisted shares, is moving towards 12.5% without indexation. However, it is crucial to confirm the precise rate and availability of indexation for unlisted equity shares post-Budget 2024. For Non-Resident Indians (NRIs), there might be a forex fluctuation benefit to consider for LTCG on unlisted shares.
How are Bonus Shares Taxed?
The bonus shares tax India treatment hinges on their Cost of Acquisition (COA). When a company issues bonus shares, you don't pay anything to get them. If these bonus shares were allotted after April 1, 2001, their cost of acquisition bonus shares is considered nil (zero). If allotted before April 1, 2001, the Fair Market Value as on April 1, 2001, would be taken as the cost. The holding period for bonus shares starts from the date they are allotted to you. When you sell these bonus shares, the entire sale proceeds (minus any selling expenses) become your capital gain if the COA is nil. This gain will then be classified as STCG or LTCG based on how long you held them from the allotment date.
Tax Implications for Rights Issues
Rights issue taxation involves a few elements. When a company offers rights shares, existing shareholders can buy more shares, usually at a price lower than the market price. The Cost of Acquisition (COA) for rights shares you subscribe to is the amount you actually paid to the company for those shares. The holding period for these rights shares starts from their allotment date. If you choose not to subscribe and instead renounce (sell) your rights entitlement to someone else, any profit you make from renouncing the rights is treated as a short-term capital gain. When you eventually sell the rights shares you subscribed to, the capital gains on rights shares are calculated like any other share, using your subscription cost as the COA and the holding period from allotment.
Capital Gains on Gifted or Inherited Shares
The tax on inherited shares India and capital gains on gifted stocks has a special rule for Cost of Acquisition (COA) and holding period. When you receive shares as a gift or through inheritance, you don't pay tax at the time of receiving them. However, when you later sell these shares, capital gains tax will apply. For calculating these gains, the COA will be the cost for which the previous owner originally purchased those shares. Also, the holding period will include the period for which the shares were held by the previous owner. So, if your father bought shares in 2010 and gifted them to you in 2023, and you sell them in 2024, your holding period would be from 2010, likely making it a long-term capital gain for you. The tax is paid by you (the recipient) at the time of sale.
Overview of ESOP Taxation
ESOP capital gains tax is one part of Employee Stock Option Plan (ESOP) taxation, which typically occurs in two stages. The first stage is when you exercise your options and shares are allotted to you; the difference between the Fair Market Value (FMV) of the shares on the exercise date and the price you paid (exercise price) is taxed as a perquisite (salary income). The second stage is the capital gains stage, which occurs when you sell these shares. For calculating capital gains, the Cost of Acquisition (COA) of these shares will be the FMV that was considered on the exercise date (the value on which you already paid perquisite tax). The holding period starts from the date the shares were allotted to you after exercising the option. The gain (Sale Price - FMV on exercise date) will be STCG or LTCG depending on this holding period.
What is Securities Transaction Tax (STT) and Its Relevance?
STT on shares, or Securities Transaction Tax India, is a tax levied by the government on transactions involving the purchase or sale of securities that are done through a recognized Stock Exchange. This means when you buy or sell equity shares, equity-oriented mutual fund units, or engage in derivatives trading (futures and options) on an exchange, STT is applicable. For the purpose of this article focusing on STT applicability capital gains on equity shares, it's crucial to know that the payment of STT is often a prerequisite for availing the concessional tax rates under Section 111A (for STCG) and Section 112A (for LTCG) for listed shares. Your Broker usually deducts STT at the time of the transaction itself.
Here are some common STT rates (these can change, so always verify current rates):
Delivery-based purchase of equity shares: STT is typically paid by both buyer and seller, but rates differ.
Delivery-based sale of equity shares: STT is levied on the seller.
Intraday trading of equity shares: STT is levied on the seller on the sale leg. Understanding these rates is helpful for comprehending overall stock market transactions costs.
How to Save Capital Gains Tax on Shares: Exemptions & Strategies
Investors often look for ways to save capital gains tax on shares. The Income Tax Act provides certain capital gains tax exemptions India and strategies that can help legally reduce your tax liability, particularly on long-term capital gains. Popular options include Section 54F exemption (investing gains in a residential house) and investing in Section 54EC bonds. Another key strategy is tax loss harvesting India, along with properly setting off and carrying forward capital losses. Utilizing the Capital Gains Account Scheme (CGAS) can be helpful if you need more time to reinvest gains under sections like 54F. It's very important to ensure all conditions for claiming these exemptions are strictly met.
Section 54F: Exemption by Investing LTCG in a Residential House
Section 54F conditions allow you to claim an exemption from Long-Term Capital Gains (LTCG) arising from the sale of any asset other than a residential house (for example, shares, bonds, or gold), if you invest LTCG in property, specifically a new residential house. To get the full capital gains exemption residential house benefit under Section 54F, the entire net consideration (sale proceeds) from your original asset (e.g., shares) must be invested in purchasing one new residential house in India within one year before or two years after the date of sale, or in constructing one new residential house within three years from the date of sale. A key condition is that on the date of selling the original asset, you should not own more than one residential house, other than the new one you are investing in. If only a portion of the net consideration is invested, the exemption is proportionate.
Section 54EC: Exemption by Investing LTCG in Specified Bonds
Section 54EC bonds offer another avenue to save tax on Long-Term Capital Gains. You can claim an exemption by investing your LTCG (arising from the sale of land or building or both, and also extended to gains from any long-term capital asset) in specified capital gains tax saving bonds. These bonds are typically issued by entities like the National Highways Authority of India (NHAI) or Rural Electrification Corporation (REC). The investment must be made within six months from the date of transfer of the original asset. There's a maximum limit of Rs. 50 lakh that can be invested in these bonds in a financial year. These NHAI REC bonds come with a lock-in period, currently five years (previously three years). If you sell or convert these bonds before the lock-in period ends, the exempted capital gain will become taxable in the year of such sale/conversion.
Setting Off and Carrying Forward Capital Losses from Shares
Properly managing set off capital losses India is a vital part of tax planning for share investments. If you incur a Short-Term Capital Loss (STCL) from shares, you can set it off against Short-Term Capital Gain (STCG) from any asset or Long-Term Capital Gain (LTCG) from any asset. If you have a Long-Term Capital Loss (LTCL) from shares, the LTCL set off rule states it can only be set off against LTCG from any asset; it cannot be set off against STCG. If you cannot set off your capital losses in the same year, you can carry forward capital losses shares for up to 8 assessment years immediately following the assessment year in which the loss was first incurred. For STCL, the carried-forward loss can be set off against future STCG or LTCG. For LTCL, the carried-forward loss can only be set off against future LTCG. Crucially, to be eligible to carry forward these losses, you must file your Income Tax Return (ITR) by the due date.
Basic Tax Loss Harvesting for Share Investments
A tax loss harvesting strategy India can be a smart move for active investors. This concept involves strategically selling shares that are currently at a loss to offset the capital gains you've realized from other investments during the financial year. By booking these losses, you can reduce your overall taxable capital gains, and thus, your tax outgo. Tax loss harvesting is often considered towards the end of the financial year or when an investor is rebalancing their portfolio. It's a way to manage your tax liability proactively, but it should be done carefully, considering your overall investment goals.
How to Report Capital Gains from Shares in Your ITR (AY 2025-26)
To report capital gains in ITR for Assessment Year 2025-26, you need to use the correct ITR form and fill in specific schedules. Knowing how to show share profit in ITR accurately is crucial for compliance. Generally, individuals use ITR-2 or ITR-3. You will primarily use Schedule CG (Capital Gains) for reporting the summary of your gains. For LTCG from listed equity shares or equity MFs where Section 112A is applicable (especially with grandfathering), detailed scrip-wise information needs to be provided in Schedule 112A. Your Form 26AS and Annual Information Statement (AIS) will also reflect some of these transactions, which should be reconciled. For Foreign Institutional Investors (FIIs) or Foreign Portfolio Investors (FPIs), Schedule 115AD might be relevant. TaxBuddy can help you file your ITR accurately.
Which ITR Form for Share Capital Gains? (ITR-2 vs. ITR-3)
Choosing theITR form for capital gains depends on your overall income profile. If you are an individual or a Hindu Undivided Family (HUF) and have income from capital gains (like from selling shares) but do not have income from a business or profession, you will typically use ITR-2 capital gains. However, if you also have income (or loss) from a business or profession, in addition to capital gains, then ITR-3 capital gains is the form you should use. Selecting the correct ITR form is the first step to ensuring your tax return is processed smoothly.
Important Schedules: Schedule CG and Schedule 112A
When you fill Schedule 112A and Schedule CG details ITR, you are providing the tax department with detailed information about your capital gains. Schedule CG is the main schedule where all types of capital gains (short-term, long-term, from shares, property, etc.) are consolidated and reported. For Long-Term Capital Gains (LTCG) arising from the sale of listed equity shares or units of an equity-oriented mutual fund on which Securities Transaction Tax (STT) is paid (where Section 112A applies), you need to provide scrip-wise details in Schedule 112A. This is particularly important if you are claiming the grandfathering benefit for shares acquired on or before January 31, 2018. For STCG from shares and LTCG from other assets (or those where Section 112A isn't applicable or grandfathering isn't involved), consolidated reporting within Schedule CG is usually done based on the holding periods and asset types.
Documents Checklist for Reporting Share Capital Gains
Having the right documents for capital gains ITR filing is essential for accuracy and to support your claims if the tax department asks questions later. For your ITR filing share transactions, make sure you have:
Broker statements or trading statements from your stockbroker(s) for the financial year. These show all your buy and sell transactions, dates, quantities, and prices.
Contract notes for each transaction, if available, as they are legal records of your trades.
Bank statements to trace the flow of funds for share purchases and sales.
Details of Cost of Acquisition for all shares sold, including dates of purchase.
If the grandfathering clause under Section 112A is applicable (for shares bought on or before Jan 31, 2018), you'll need the Fair Market Value (FMV) details of those shares as of Jan 31, 2018.
Your Form 26AS and Annual Information Statement (AIS) from the income tax portal to reconcile your reported gains with the information available to the tax department.
Your Capital Gains Tax Checklist & How TaxBuddy Can Help
This capital gains tax checklist provides a quick rundown, and you can explore TaxBuddy services for tax filing help shares. Navigating capital gains can be tricky, but being organized is half the battle won.
Free Download: Capital Gains Tax Filing Checklist PDF
A downloadable Capital Gains Tax Filing Checklist PDF can be very handy. (Imagine a download link/button here). This checklist would summarize key steps:
Determine if your gains are Short-Term Capital Gains (STCG) or Long-Term Capital Gains (LTCG) based on holding periods.
Calculate gains accurately, considering the Cost of Acquisition, Sale Price, and any expenses. Remember to apply grandfathering rules for LTCG if applicable.
Gather all necessary documents: broker statements, contract notes, FMV details, etc.
Identify and claim any eligible exemptions (e.g., Section 54F, Section 54EC).
Report gains correctly in the appropriate schedules (Schedule CG, Schedule 112A) of your Income Tax Return.
File your ITR on or before the due date to avoid penalties and to carry forward losses, if any.
Simplify Your Share Tax Filing with TaxBuddy
TaxBuddy's experts can make File your taxes with TaxBuddy a smooth process. We can assist with accurate capital gains calculation, ensure you're considering all the latest tax rules (including the Budget 2024 changes for FY 2024-25), and help with ITR filing. Our goal is to ensure compliance with tax laws while helping you maximize any eligible deductions and exemptions. If you need Get expert tax advice on your share transactions, TaxBuddy is here to help.
Conclusion: Navigating Share Capital Gains Tax in India
The capital gains tax summary India shows it is a vital part of managing your investments. Understanding the difference between STCG and LTCG is the first step. Investors must be aware of the current tax rates, especially the changes for FY 2024-25 introduced by Budget 2024, which affect calculations from July 23, 2024. Accurate calculation of gains, considering grandfathering for older shares, is essential. Exploring available exemptions like Section 54F or 54EC can help reduce tax liability. Finally, timely and accurate share tax filing key points include correct ITR form usage and schedule declaration. Staying informed about these aspects of Tax Compliance is key for effective Financial Planning and a sound Investment Strategy.
Key points to remember:
Distinguish between STCG (holding ≤12 months) and LTCG (holding >12 months) for listed equity.
Know the current tax rates:
STCG: 15% (before July 23, 2024) / 20% (on/after July 23, 2024).
LTCG (Sec 112A): 10% over Rs. 1 lakh (before July 23, 2024) / 12.5% over Rs. 1.25 lakh (on/after July 23, 2024).
Calculate gains meticulously, using the grandfathering clause for shares bought before Jan 31, 2018.
Utilize exemptions (Sec 54F, 54EC) and loss set-off/carry-forward provisions.
Report gains accurately in your ITR (ITR-2/ITR-3, Schedule CG, Schedule 112A).
File your ITR by the due date.
Staying updated and careful with your calculations will help you manage your share capital gains tax effectively. For any specific queries or assistance, it's always a good idea to Contact TaxBuddy for personalized advice.
FAQs: Capital Gains Tax on Shares in India
1. What is the new STCG tax rate on shares after Budget 2024?
A: 20% if sold on/after July 23, 2024, for STT paid shares; 15% if sold before.
2. What is the new LTCG tax rate and exemption on shares after Budget 2024?
A: 12.5% on gains over Rs. 1.25 lakh if sold on/after July 23, 2024; 10% over Rs. 1 lakh if sold before.
3. Is indexation benefit available for LTCG on listed equity shares?
A: No, for listed equity shares under Sec 112A.
4. How is capital gain on shares gifted to me taxed?
A: Cost to the previous owner is your cost, and their holding period is included. You pay tax on the sale.
5. Can I set off STCL from shares against LTCG from property?
A: Yes, STCL can be set off against STCG or LTCG. But LTCL only against LTCG.
6. Do I need to pay advance tax on capital gains from shares?
A: Yes, if total tax liability after TDS exceeds Rs. 10,000.
7. What happens if I don't report capital gains in my ITR?
A: Penalties, interest, and scrutiny from the tax department.
8. Is STT deductible as an expense when calculating capital gains?
A: No, STT is not allowed as a deduction from capital gains. However, other transfer expenses like brokerage are.
9. How is capital gains tax different for resident and non-resident Indians (NRIs)?
A: TDS applicability for NRIs, and potential DTAA benefits. (Refer to a dedicated NRI article if TaxBuddy has one.)
10. Are intraday trading profits treated as capital gains?
A: No, generally treated as speculative business income, not capital gains.
11. What is the tax treatment for shares held as stock-in-trade vs. investment?
A: Stock-in-trade profits are business income; investment profits are capital gains. Depends on factors like volume, frequency, intention.
12. Can I revise my ITR if I forgot to include capital gains?
A: Yes, within the specified time limit for filing a revised return.
13. How does the choice between old and new tax regime affect capital gains tax?
A: Capital gains tax rates under Sec 111A and 112A are special rates and apply independently of the regime chosen. However, the overall tax liability might differ due to slab rates for other income and available deductions under the old regime.
14. What is the deadline for filing ITR with capital gains income?
A: Usually July 31st for individuals not requiring audit, but check for the current AY.
15. Where can I find the Fair Market Value (FMV) of shares as of Jan 31, 2018?
A: Stock exchange websites, financial portals often archive this data.
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