Ask me anything about taxes on trading and investing

[tallerballer]

Your wish. Tradebook maybe

[Kumar_Thakkar]

If I choose new regime than does my short and long term gain also will be tax free (with rebate )up to 7 lac or not?

Some tax expert saying yes and some saying no because every person takes different understanding from law of IT and I’m confused totally

And can I show this as my primary business income to get up to 7 lac free as someone suggested me this?

[Quicko]

Hey @Kumar_Thakkar,

A rebate of up to ₹25,000 is available on income up to ₹7L. You will get the rebate on your STCG, however, this rebate is not available on LTCG from listed stocks and equity mutual funds.

The STCG will be taxed at 15% on which you can claim the rebate. Whereas, LTCG above ₹1 lakh will be taxed at 10%.

@Kumar_Thakkar

And can I show this as my primary business income to get up to 7 lac free as someone suggested me this?

Reporting of trading income is based on your intent and you can declare your capital gains as business income if trading is your full-time business. In that case, you will get a rebate on the entire income but you’ll also have to report your books of accounts like balance sheet and P&L while filing the ITR. Moreover, if you declare your capital gains as business income in one FY, you should continue to report it in the same manner for the upcoming years.

Hope this clarifies.

[Kumar_Thakkar]

Thanks Got It.

One more doubt if STCG is as a example 7 lac and 5 lac so what would be tax amount in both case in both regimes.

[Kumar_Thakkar]

@Quicko hi please help for this one

[Quicko]

Hi @Kumar_Thakkar,

If there’s no other income apart from the STCG,

Under the old regime, the tax on ₹5L will be ₹26,000 and on ₹7L, it’ll be 70,200.
Under the new regime, the tax on ₹5L will be ₹5200 and on ₹7L, it’ll be 36,400.

[Chetan_Nahata]

@Quicko

Under the old regime, the tax on ₹5L will be ₹26,000 and on ₹7L, it’ll be 70,200.
Under the new regime, the tax on ₹5L will be ₹5200 and on ₹7L, it’ll be 40,750.

How did u reach those numbers?

[Quicko]

Hey @Chetan_Nahata,

STCG from listed shares and equity mutual funds are taxed at 15%. You do get a rebate of ₹12,500 in the old regime and ₹25,000 in the new one. You can use this tax calculator to verify: https://incometaxindia.gov.in/Pages/tools/advance-tax-calculator.aspx

[vijethdinesha]

FYI, Zerodha does not correctly report tax P&L for LIQUIDBEES under capital gains.

Inaccurate capital gains for LIQUIDBEES in Zerodha Tax P&L

LIQUIDBEES distributes dividends in the form of additional units credited periodically. These units are treated as dividend income with TDS deductions reflected in Form 26AS and AIS, including pre-filled data in the income tax portal. The taxed dividend income is considered as the acquisition cost for the new units. So, all new units received should have a cost basis of Rs. 1000. Consequently, upon sale of LIQUIDBEES units at Rs. 1000 each, there should ideally be no capital gains, except for m…

Requesting you to acknowledge and see if @Quicko can do something to help us file capital gains correctly.

[Kumar_Thakkar]

Thanks a lot , it helps…