Will my capital gains below ₹5 lakh be taxed if I have no other income?

​My taxable income is beneath the ₹5 lakh taxation rebate limit. ​If I gain ₹4 lakh successful semipermanent superior gains (LTCG) and person nary income from immoderate different root for the applicable financial, however volition the gains beryllium taxable?

—Name withheld connected request 

As per the provisions of Income-tax Act, superior gains arising from transportation of a semipermanent superior plus being equity stock successful a institution oregon units of equity oriented communal fund, shall beryllium taxed astatine 10% (plus applicable surcharge and cess) connected superior gains exceeding ₹1 lakh, if STT (securities transaction tax) has been paid astatine the clip of acquisition and transportation of specified superior asset.

LTCG arising from different superior assets are taxed arsenic per the respective/applicable provisions and taxation rates.

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An individual, qualifying arsenic nonmigratory arsenic per the provisions of Income-tax Act, is eligible to see the payment of progressive slab rates and tin set the basal exemption bounds ( ₹3 lakh nether caller default taxation authorities and ₹2.5 lakh nether aged taxation authorities for non-senior national taxpayers) against LTCG, arsenic whitethorn beryllium remaining aft accommodation against incomes different than superior gains, to the grade prescribed.

Further successful lawsuit of a nonmigratory individual, taxation rebate of up to ₹25,000 is disposable wherever full income does not transcend ₹7 lakh (under caller taxation regime) oregon up to ₹12,500 wherever full income does not transcend ₹5 lakh (under aged taxation regime). However, specified payment is not disposable successful lawsuit of LTCG arising from merchantability of equity stock / units of equity oriented communal fund, taxed astatine peculiar complaint of 10%.

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Thus, connected an presumption that the LTCG of ₹4 lakh is arising from merchantability of STT paid equity shares/equity oriented communal funds, LTCG up to ₹1 lakh is not taxable. The equilibrium LTCG of ₹3 lakh shall beryllium adjusted against the disposable basal exemption bounds nether the caller taxation regime, provided you are a taxation nonmigratory of India for the applicable fiscal twelvemonth and assuming you bash not person immoderate income different than the LTCG.

Parizad Sirwalla is spouse and head, planetary mobility services, tax, KPMG successful India.

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Published: 05 May 2024, 04:03 PM IST