Capital Gains and dividends calculated on your IT Returns. How would that work?

Capital Gains and dividends calculated on your IT Returns. How would that work??

@Quicko can you.

Capital Gains are taxable under 2 categories depending on the duration of holding of the capital assets. The categories are Long-Term Gains and Short-Term Gains. Further the rate of tax and exemption vary depending on the capital asset sold.

Capital gains tax rate on shares is as follows:

Long-Term: Exempt upto ₹1,00,000 income/profits and taxable @ 10% thereafter.
In case of unlisted shares , it is taxed @20% after indexation.

Short-Term: Taxable @ 15% if STT ( Securities Transaction Tax) paid at the time of sale. In all other cases it’s taxable under respective tax slab rates.

Dividends are taxed as per the applicable slabs.

Hey @SanjoyTalukdar

An individual has to pay tax on the profit or gain that they earn by selling any Capital Asset. This gain is further sub categorised as Long-term capital gains and short-term capital gains. The tax levied on both these categories differs based on the duration for which it has been held by the owner.

Below-mentioned is the percentage of tax that is applicable to short term and long-term capital gains:

LTGS: INR 1,00,000 is exempt from taxes and any gains more than that is taxed at 10% on the sale of Equity oriented shares/units. On the other hand, 20% tax is levied on the sale of shares that are not equity-oriented funds.

STCG: When the Security Transaction Tax is paid at the time of sale then the gains are taxable at 15% and when STT is not applicable, an individual is taxed according to their income tax slab.

Dividend income should be reported under the head Income from Other Sources. The dividend is taxable at the slab rate. From FY 2020-21 in case the dividend is above INR 5,000 TDS will be deducted on the same.

From 2021-22 onwards, as per the budget 2021 announcement, the dividend should be considered when calculating the advance tax only if the Dividend is declared.

Hope this helps!