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Adding long term capital gain to regular income tax slab ?

gekco (B.Com) (170 Points)

06 February 2017

Hello Sir, I am confused if long term capital gains need to be added to regular income tax slab as well or not. I asked few persons and getting different answers from different people. Below are two scenarios if anyone can help

Scenario 1 - Person X has income of 4 Lakh and he has got long term capital gain of Rs 50000 from ELSS . what is his total taxable income - 4 Lakh or 4 Lakh 50 Thousand

Secanario 2 - A person has got long term capital gain of 1,00,000 from sell of property after taking benefit of Indexation and paid 20% as capital gain Tax. Whether he has to add remaining 80,000 to his taxable income as well and pay income tax according to it.

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (178054 Points)
Replied 06 February 2017


	Scenario 1 - Person X has income of 4 Lakh and he has got long term capital gain of Rs 50000 from ELSS . what is his total taxable income - 4 Lakh or 4 Lakh 50 Thousand Secanario 2 - A person has got long term capital gain of 1,00,000 from sell of property after taking benefit of Indexation and paid 20% as capital gain Tax. Whether he has to add remaining 80,000 to his taxable income as well and pay income tax according to it.

1. LTCG on ELSS is tax-exempt; so taxable income remains 4 Lakhs.

2. No. The capital gains tax is actually paid along with other tax liabilities, not separately.

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gekco (B.Com) (170 Points)
Replied 07 February 2017

Thank you Sir

gekco (B.Com) (170 Points)
Replied 13 February 2017

Hello Sir,

One more question, When declaring long term capital gains in our IT return from Equity Mutual Funds Like ELSS, do we need to use indexation to calculate long term capital gain. Or it will be Total profit without indexation.

Subba Reddy Gangi Reddy (2 Points)
Replied 13 February 2017

ELSS Capital Gains after 3 years are tax exempted. so no need to indexation.

gekco (B.Com) (170 Points)
Replied 13 February 2017

Hi Subba Reddy, In ITR-4 form my accountant added long term capital gain from ELSS after indexation. Do I need to revise my return as capital gain reduced by 15000 after indexation

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gekco (B.Com) (170 Points)
Replied 14 February 2017

Hello Sir, Can you please reply to my query regarding if I need to revise long term capital gain in my ITR form or not

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (178054 Points)
Replied 14 February 2017

Yes, ELSS capital gains (redemption after 3 years) is tax-exempt, no need to pay tax over it.

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gekco (B.Com) (170 Points)
Replied 14 February 2017

Thank you Sir for your reply, My query was while mentioning capital gain under Exempted income, I have declared capital gain as 25,000 with indexation instead of 40,000 . Do I need to revise my itr to show complete amount as capital gain or I do not need to revise it

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (178054 Points)
Replied 14 February 2017

If there is no refund due as of mis-calculation (and otherwise if there is no excess tax liability), no need to revise original ITR.

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gekco (B.Com) (170 Points)
Replied 15 February 2017

Thank you Sir, I also have capital gains this year which I need to declare in my next ITR . So, shall I declare whole profile amount, or profilt amount after indexation. It seems to me the software my chartered accountant use automatically calculate gain using indexation and according to him this is the correct way.