Hi @Jayadratha
Interest Income from FD / savings account and govt securities are taxed under the head “Income from other sources” and not salary Income. IFOS income is taxed at applicable slab rate.
Thank you.
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Hello @Quicko,
What would/could be total tax that needs to be paid in this case and am i correct in my understanding in folowing situation:
Salary Income (Annual) = 106250 per month *12 = 1275000 [12L no tax and 75K standard deduction, so zero tax on salary income?]
LTCG from equity/equity MF = 125000 [1.25L LTCG exemption, so zero tax on CG in this case?]
STCG from debt/debt MF = 75000 [what would be tax in this scenario? & would this income be added to my total income and taxed at higher rate? or would this be taxed at 10%?]
@ValueInvestor0
Normal Income 1200000 below limits allowed + LTCG 125000 exemption allowed but your STCG @20% taxable
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Hello @Quicko
Are there any changes to individuals having LTCG with no other incomes.
As an individual previously can take upto 4L of LTCG without paying any taxes. Does that still stay the same or increase upto 12L
Can stgc taxed at IT be offset.
Say I had 50,000 loss in unlisted stock in stgc
Another case
Also say I have income of 8 lakh salary,
1 lakh stgc in equity at 20%
Then 2 lakh stgc in debt mutual funds.
What’s my effective tax.
Thanks. It clarifies. Follow up question. So lets say salary income is 8L plus STCG 2L, so what would be tax on this?
Hey @anakalpravin Yes, rebate u/s 87A is available against all incomes chargeable at normal rate of taxes. F&O profit is treated as Business income and chargeable to tax at slab rate.
In your case, if you do not have any other income apart from FnO profit of upto 12 lakhs, there will no Income tax payable under the new tax regime.
Thank you.
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Hey @npsh99
As per your income situation, there will be no tax on salary income of 8 lakhs.
You need to pay 20% tax on STCG of 2 lakhs i.e 40,000 plus cess applicable.
Thank you.
Hello @kvnreddy
Yes, since the basic exemption limit under the new tax regime has been increased to 4 lakhs and LTCG is also exempt upto 1.25 lakhs, now there will be no Income tax on LTCG upto 5.25 lakhs assuming you have no other income for that financial year.
Thank you.
Hey @ValueInvestor0
Let us understand taxes on your income situation: (Assuming under new regime)
Income 1 : Taxable Salary - 12,00,000 (12.75-0.75 standard deduction)
Income 2 : LTCG of 1.25 lakhs
Income 3 : STCG from debt - 75000
Total Income chargeable to tax at normal rate = 12.75,000
Tax on normal Income = 71,250 + cess.
LTCG of 1.25 lakhs will be exempt.
Hope, this helps.
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Hello @Manu_Manjunath.K.R
Lets calculate tax for your income situation as below:
Income 1 - Salary of 8 lakhs
Income 2 - STCG in equity of 1 lakhs
Income 3 - STCG in debt mutual fund of 2 lakhs.
Rebate u/s 87A is available against all the incomes chargeable to tax at slab rate. Thus you can claim the same against Salary income and STCG from debt mutual funds. Since, in your case total of both income is less than 12 lakhs, there will be no Income tax on those.
You need to pay 20% on 1 lakhs STCG from equity = 20,000 + cess.
Effective tax rate = 1.89% (20,800 on income of 11 lakhs)
Thank you.
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@Quicko Thanks for the update. Debt mutual funds are taxed at Slab rates after Amendment to Finance Bill 2023.
So income from Debt mutual funds will also be available for rebate u/s 87A, is this understanding correct?
I am pledging mutual funds for fno. The returns from the mutual funds can be considered as business income ? @Quicko
I am still bit confused between your words & @Quicko words on STCG Ask me anything about Union Budget 2025 - #33 by Quicko
Normal income in the above case would be tax free but how is debt MFs, which is taxed at slab rate goes to 20% STCG? Even if we take slab rates (8L-12L - 10%, 12-16L - 15%) won’t it be 75k taxed at 10%/15% in the case i mentioned?
Hello @Quicko,
Thanks for answering but a small clarification in CG from debt MFs added to Taxable Income (salary) would be helpful.
Case 1: Let’s say,
Income 1: 1L*12 = 12L is salary.
Income 2: 75k STCG from debt MFs.
Total income chargeable to tax at normal rate would be = 1275000 (?) [Income 1+Income 2]
In this case what would the,
tax be = 0? [12L salary - 0% + 75k STCG but 75k standard deduction would again end up bringing tax to 0]
Case 2: Let’s say,
Income 1: 95k*12= 11.4L is salary.
Income 2: 60k STCG from debt MFs.
Total income chargeable at normal rate would be = 1200000 (?) [Income 1+Income 2]
In this case what would the,
tax be = 0? [11.4L salary - 0% + 60k STCG if added will be equal to 12L so no tax]
Hi @Quicko
Is there any clarity on STCG on Debt Mutual funds for AY-2026-27?
As for AY-2024-25, “STCG on Debt Funds” was not covered under Sec 111A & was taxed at the individual’s tax slab including availing Sec 87A rebate. This I know for a fact.
For AY-2025-26 (for which ITR filing is still 3 months away) I guess the same rules apply.
My query is that after “Budget 2025” tabled yesterday (Feb 01, 2025) does the same apply for AY-2026-27?
I ask this because I read online…
“Budget 2025 has now specified that income taxable at a special rate will not get the benefit of income tax rebate under section 87A. This includes income such as capital gains under section 111A (short term capital gains), section 112 (long term capital gains), etc.”
However, Sec 111A does not apply to STCG on Debt Funds. Please clarify.
Thanks.
Hey @Quicko
What are these std deduction, rebate under which regime do they come. how are they applied. How are these things related tl the “headline of no tax upto 12 Lakh income” apply? Look I don’t know anything just curious mind if sound dumb when posing them.
And if you could tell about any resource where I would get to look everything related to income tax wherein they have things present with context.
Thanks in advance 