The common question of taxpayers is basic exemption limit available for short term capital gain?
Any capital asset held by the taxpayer not more than 36 months immediately preceding the date of its transfer will be treated as a short-term capital asset. However, in respect of certain assets like shares (equity or preference) which are listed in a recognized stock exchange in India, units of equity-oriented mutual funds, listed securities like debentures and Government securities, Units of UTI and Zero Coupon Bonds, the period of holding to be considered is 12 months instead of 36 months. The period of holding is to be considered as 24 months instead of 36 months in case of unlisted shares of a company or an immovable property being land or building or both.
What is the basic exemption limit for short term capital gain?
Capital gain arising on the sale of short-term capital assets is termed a short-term capital gain. However, there are a few exceptions to this rule, like a gain on depreciable assets is always taxed as a short-term capital gain.
Section 111A is applicable in the case of STCG arising on the transfer of equity shares or units of equity-oriented mutual funds or units of business trust, which are transferred through a recognized stock exchange and such transaction is liable to securities transaction tax (STT). If the conditions of section 111A as given above are satisfied, then the STCG is termed as STCG covered under section 111A. Such gain is charged to tax at 15% (plus surcharge and cess as applicable).
The
short term capital gain basic exemption limit
means the level of income up to which a person is not required to pay any tax.
Only a resident individual and resident HUF can adjust the exemption limit against STCG covered under section 111A. Thus, a non-resident individual/HUF cannot adjust the exemption limit against STCG covered under section 111A.The income tax rates for different age groups for FY 2023-24 (AY 2024-25) is as follows:
The tax rates in the new tax regime is same for all age groups either individuals(upto 60 years), HUFs, senior citizens(60 years-80 years) or super senior citizens(80 years). The individuals are eligible for tax rebate under section 87A if their net taxable income is Rs 7 lakhs. An individual does not have to pay any tax if his income falls below Rs 3 lakhs.
A resident individual/HUF can adjust the STCG covered under section 111A against the basic exemption limit but such adjustment is possible only after making adjustments to other income. In other words, the first income other than STCG covered under section 111A is to be adjusted against the exemption limit and then the remaining limit (if any) can be adjusted against STCG covered under section 111A.
I hope this clarifies your understanding of the question:
is basic exemption limit available for short term capital gain.
Need help with property transfer and documentation? Contact legal experts here Read more: Which banks are authorised to open capital gain account? How to withdraw money from capital gain account? Time Limit for Deposit in Capital Gain Account Scheme
Is Basic Exemption Limit Available for Short Term Capital Gain?
Anjali
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2023-08-29T09:31:50+00:00 2023-09-05T12:06:37+00:00Comment
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