What is the rate of capital gains tax in India 2024?
I'll answer
Earn 20 gold coins for an accepted answer.20
Earn 20 gold coins for an accepted answer.
40more
40more
Oliver Brown
Works at Facebook, Lives in Menlo Park, CA
As an expert in the field of finance and taxation, I'm often asked about the specifics of capital gains tax in various countries. India, with its dynamic economy and a growing number of investors, has a set of rules that govern the taxation of capital gains. It's important to understand that capital gains tax in India is categorized into two main types: Short Term Capital Gains (STCG) and Long Term Capital Gains (LTCG).
Short Term Capital Gains (STCG) are the profits made from the sale of an asset that is held for a period of less than 36 months. The rate of tax on STCG varies depending on the individual's income tax bracket. For individuals who do not fall under the highest tax bracket, the rate is typically 15%. However, this is subject to certain conditions and exemptions.
Long Term Capital Gains (LTCG), on the other hand, are the profits made from the sale of an asset that is held for more than 36 months. Prior to the changes in the tax laws in 2018, there was no tax on LTCG from the sale of shares and equity-oriented funds, provided Securities Transaction Tax (STT) was paid on the transaction. However, with the amendments, the government introduced a tax on LTCG exceeding INR 1 lakh at a flat rate of 10%. This means that if your LTCG from the sale of shares and equity-oriented funds is more than INR 1 lakh, you are liable to pay tax at the rate of 10% on the gains exceeding this threshold.
It's also important to note that there are certain exemptions and deductions that can be applied to reduce the tax liability on capital gains. For instance, indexation benefits can be availed to increase the cost of acquisition of the asset, thereby reducing the capital gains and consequently the tax liability.
Furthermore, the tax treatment of capital gains can also vary based on the type of asset sold. For example, the tax rates for capital gains from the sale of real estate can be different from those of financial assets like shares and mutual funds.
In conclusion, the rate of capital gains tax in India is not a one-size-fits-all figure. It is determined by the type of gains (short term or long term), the nature of the asset, and the individual's income tax bracket. It is always advisable to consult with a tax professional or financial advisor to understand the specific tax implications of capital gains on one's investment portfolio.
Short Term Capital Gains (STCG) are the profits made from the sale of an asset that is held for a period of less than 36 months. The rate of tax on STCG varies depending on the individual's income tax bracket. For individuals who do not fall under the highest tax bracket, the rate is typically 15%. However, this is subject to certain conditions and exemptions.
Long Term Capital Gains (LTCG), on the other hand, are the profits made from the sale of an asset that is held for more than 36 months. Prior to the changes in the tax laws in 2018, there was no tax on LTCG from the sale of shares and equity-oriented funds, provided Securities Transaction Tax (STT) was paid on the transaction. However, with the amendments, the government introduced a tax on LTCG exceeding INR 1 lakh at a flat rate of 10%. This means that if your LTCG from the sale of shares and equity-oriented funds is more than INR 1 lakh, you are liable to pay tax at the rate of 10% on the gains exceeding this threshold.
It's also important to note that there are certain exemptions and deductions that can be applied to reduce the tax liability on capital gains. For instance, indexation benefits can be availed to increase the cost of acquisition of the asset, thereby reducing the capital gains and consequently the tax liability.
Furthermore, the tax treatment of capital gains can also vary based on the type of asset sold. For example, the tax rates for capital gains from the sale of real estate can be different from those of financial assets like shares and mutual funds.
In conclusion, the rate of capital gains tax in India is not a one-size-fits-all figure. It is determined by the type of gains (short term or long term), the nature of the asset, and the individual's income tax bracket. It is always advisable to consult with a tax professional or financial advisor to understand the specific tax implications of capital gains on one's investment portfolio.
2024-06-15 15:41:32
reply(1)
Helpful(1122)
Helpful
Helpful(2)
Studied at the University of Toronto, Lives in Toronto, Canada.
However in case of sale of shares & equity oriented funds, Short Term Gains are taxed at 15%. Usually, Long Term Capital Gains are taxed at a special rate of 20%, but Long Term gains on Shares (on which STT is chargeable) and Equity Mutual Funds are not taxed.
2023-06-18 09:00:30
Felix Davis
QuesHub.com delivers expert answers and knowledge to you.
However in case of sale of shares & equity oriented funds, Short Term Gains are taxed at 15%. Usually, Long Term Capital Gains are taxed at a special rate of 20%, but Long Term gains on Shares (on which STT is chargeable) and Equity Mutual Funds are not taxed.
