Income Tax Return on Capital Gains

Have you made capital gains from the sale of property, shares or Mutual Funds, or need to claim tax relief under Section 89? File your income tax return on capital gains with the help of our experts!

Documents Required

Bank Statements

TIS

Form 16

AIS

Form 26AS

Capital Gain Statement

Proof of Investment

FirstFiling - Tax Return Filing For Capital gain

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ITR on Capital Gains

Pricing Plans

Silver

₹2499/-

  • Tax filing for individuals with single & Multiple Form 16 
  • Tax Due/Refund Status and Filing Confirmation
  • CA Assisted Tax Filing for Capital Gain
  • Any Slab of Income
  • Income from other Sources, House Property Income
  • Director's Declaration in any company
  • Whatsapp Call / Email Support
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Platinum

₹1999/-

  • Updated Tax Return (ITR-U) filing   
  • Any Income Slab
  • Tax Due/Refund Status and Filing Confirmation
  • CA Assisted Tax Filing for Capital gain
  • Income from other Sources, House Property Income
  • Director's Declaration in any company
  • Whatsapp Call / Email Support
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Filed your ITR? Here’s what you need to do now…

Steps for Verify E-Filing

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Benefits of ITR Filing

Why File Your Income Tax Return?

File ITR Now

If you've paid a higher income tax than your actual tax liability, you should file income tax returns to claim a refund. After verification, you’ll get the refund directly into your bank account!

Applying for a Visa to visit a foreign country? You'll most likely have to submit your ITR so the embassy can analyse your income and tax status.

Your income stability is critical for the lenders. This is why you’ll have to submit your ITRs of at least 3 consecutive years when applying for loans.

You should file your income tax returns every year before the due date to avoid any penalties or other severe consequences.

Don't Know Which ITR to File

Types of Income Tax Return Form

The total income of an individual must not exceed Rs.50 lakh. His/her source of income must be:

Salary

One Hopuse Property

Other Sources Of Income, I.E., Interest Income, Dividends, Etc.g

Agricultural Income Up To Rs.5,000 Only.

Individual Must Be Ordinarily Resident In India.

A salaried individual can file his/her tax return using the ITR-2 form if:

Has A Total Annual Income Of More Than Rs. 50 Lakh.

Is A Director Of A Corporation.

Owns Unlisted Equity Shares.

Is Owning Assets Outside Of India Considered Income From Salary, Multiple Homes, Capital Gains, And Other Kinds Of Revenue.

Is A Member Of The Hindu Undivided Family (HUF).

A Resident Or A Non-Resident (Both Ordinarily Or Not Ordinarily).

by an individual or a Hindu Undivided Family having income from the following sources are eligible to file ITR-3:

Pursuing A Profession Or Business.

Invested In Unlisted Equity Shares During The Fiscal Year.

An Individual Director Of A Firm.

The Return Could Include Earnings From Rental Property, Salaries, Pensions, And Other Sources Of Income.

Income Earned As A Partner In The Company.

Individuals, HUFs, and partnership firms having the following total annual income are required to file Form ITR 4:

Business Income As Per Section 44AD Or Section 44AE.

Earnings From A Profession As Determined Under Section 44ADA.

Having A Salary Or Pension That Is Up To Rs. 50 Lakh.

Income From A Single Residential Property Earning Up To Rs. 50 Lakh (Including The Brought Forward Loss Or Loss To Be Carried Forward Cases Under This Head).

Up To Rs. 50 Lakh In Income From Other Sources (Including Winning From The Lottery And Income From Horse Races).

Information

All You Need to Know About Tax on Capital Gain

Capital gain is the profit you make when you sell a capital asset. Capital Gain is is your income and this income is chargeable to tax. The tax calculated on capital gains is called the tax on capital gains or capital gain tax.

Capital assets include the property you own and can be transferred, like land, buildings, shares, patents, trademarks, jewellery, leasehold rights, machinery, vehicles, etc.

Additional Information on

Information on Tax on Sales of Shares or Immovable Property

Understanding Dividends

A dividend is a portion of the profits earned by the mutual fund that is distributed to its investors. Dividends received from equity mutual funds are taxable in the hands of the investor as per the individual's income tax slab rates.

The mutual fund no longer pays the DDT, and the dividend income is added to the investor's total income and taxed accordingly.

Understanding Business Head

An intraday trade is a transaction where you buy and sell shares within the same trading day. An intraday trade aims to profit from short-term price movements in the market. It comes under the category of Business head. It involves two categories namely:

Speculative business income refers to the income that is earned through buying and selling securities or other financial instruments with the intention of profiting from short-term price fluctuations.

Non-speculative business income refers to income earned through trading in futures and options. These financial instruments are specifically designed for hedging purposes and also for the delivery of the underlying contracts.

The tax on business income from your share transactions is not subject to a set rate, unlike capital gains. Your business revenue is added to the other taxable income you have, and you pay taxes using the appropriate tax slab rates for the current fiscal year.

EXEMPTIONS

Long-term capital gains (LTCG) exemption: If shares/mutual funds are held for a period of more than 12 months, the gains made on their sale are considered LTCG. LTCG on equity shares/mutual funds up to Rs.1 lakh are exempt from tax. Any amount of LTCG in excess of Rs.1 lakh is taxable at a rate of 10%.

Short-term capital gains (STCG) tax: If shares/mutual funds are held for a period of fewer than 12 months, the gains made on their sale are considered STCG. STCG on equity shares/mutual funds are taxable at a rate of 15%.

Equity-linked savings schemes (ELSS) exemption: Investment in ELSS mutual funds qualifies for a deduction under Section 80C of the Income Tax Act, up to a maximum of Rs.1.5 lakh in a financial year.

Filing Tax Returns For The Sale Of Shares/Mutual Funds

You need to calculate your capital gains from the sale of Shares/Mutual Funds.

Determine whether the capital gains are long-term or short-term as Long-term capital gains are taxed differently than short-term capital gains.

ITR 2 is the form where you need to report the capital gains under the head "Capital Gains" in Schedule CG.

If any deductions or exemptions are available on capital gains, you need to claim them under Schedule EI.

Calculate the total tax payable on the capital gains and pay any outstanding tax liability.

Verify your ITR and file it with the Income Tax Department. It is important to ensure that all the details provided in the ITR are are accurate and complete to avoid any penalties or fines for incorrect or delayed filing of returns.

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Frequently Asked Questions

Capital assets include the property you own and can transfer, like land, buildings, house property, vehicles, patents, trademarks, leasehold rights, machinery, jewelry, etc. Capital assets also include the rights in or in relation to an Indian company, including rights of management or control or any other right.

The following are not considered capital assets:


  • Any stocks or consumables or raw material held for the purpose of Business or profession 

  • goods such as clothes or furniture, held for personal use.

  • Agricultural land in India in a rural area

Short-term capital assets

Short-term capital assets are held for less than or equal to 36 months. So if you sell the asset within 36 months of buying it, it would be considered a short-term capital asset.

But, in some cases, the holding period is reduced to 24 months and 12 months:


  • The holding period would be 24 months if the asset is an immovable property like land, building, or house. So, if you sell an immovable property within 24 months of buying it, it would be called a short-term capital asset.

  • Similarly, equity shares of a company listed on the recognised stock exchange, securities listed on the recognised stock exchange, UTI units, equity-oriented mutual fund units, and zero-coupon bonds have a holding period of 12 months. If they are sold off before 12 months of purchase, they would be called short-term capital assets.


Long-term capital assets

Long-term capital assets are held for more than 36 months before selling. Immovable property sold after 24 months is categorised as a long-term capital asset. In the case of equity shares, securities, mutual fund units, etc., the holding period of 12 months is applicable. If sold off after 12 months, they would be categorised as long-term capital assets.

Capital gain is the profit or gain arising from the sale of a capital asset. This gain attracts tax liability in the year in which the transfer of the capital asset happens. The Income Tax Act has exempted assets received as gifts by way of an inheritance or will and they are not calculated under capital gains.

Short-Term Capital Gain
Short-term capital gains are the profits you earn when you sell your capital assets within one year of holding them. Although, it is important to remember that the holding period varies according to the capital asset.

  • When the security transaction tax is applicable: short-term capital gain tax is 15%
  • When a security transaction tax is not applicable short-term capital gain tax is calculated based on the income of the taxpayers and is automatically added to the ITR of the taxpayer, charged at normal slab rates.
Long-Term Capital Gain
Long-term capital gains are the profits you earn when you sell your capital assets after one year. Similar to short-term capital gains, the period of holding for different assets to be claimed as long-term assets varies according to the asset.
  • Long-term capital gain tax is applicable at 20%, except on the sale of equity shares and the units of equity-oriented funds.
  • Long-term capital gains tax is applicable at 10% over and above INR 1 lakhs on the sales of Equity shares and units of equity-oriented funds.

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