Income only LTCG from stock investment

Taxation
1

If person has income only LTCG from stock investment then till what amount he can avoid taxes ? or pay zero tax

2

Every individual is entitled to a basic income tax exemption limit. If the total income, including LTCG, is below this limit, no tax is payable.

If your total LTCG is below ₹1.25 lakh then no tax, If your total LTCG exceeds ₹1.25 lakh but your total income (including LTCG) is within the basic exemption limit, then no tax is payable, because your entire income is below the taxable threshold.

You can refer to this link for more info on LTCG.

3

This is true for a resident. However for non resident LTCG cannot be merged with the total exemption limit. It is restricted to 1.25l

4

Hi @Shreevatsa_Rao,

If this is the only source of income, you’ll get the basic exemption of ₹3L under the new regime. Moreover, LTCG from stocks and equity MFs are exempt up to ₹1.25L.

5

Ok Lets take an Example - If Someone has 5L LTCG and 5L STCG and no other income.
So total income is 10L and exemption is folr 3L so total taxable income is 7L.

  • Tax slab for 1-3L is 0% so ----------- 0K
  • Tax slab for 3-7L is 5% so 5% on 3L - 20K
  • Tax slab for 7-10L is 10% so 10% on 3L - 30K

Total tax is 50K …
Is this calculation correct?

Is there any tax calculator which we can use - ITR website does not allow calculation on random scenarios.

6

1.) First, income from Salary/House property/Business Income/Other sources is adjusted.

2.) Then income from STCG is adjusted
3.) At last income from LTCG is adjusted

In your case since income is from only STCG (5L) and LTCG (5L) so acc. to new tax slab, following is the tax liability :

  • 0-3L (STCG income is exempted)
  • Tax on remaining 2L from STCG will be taxed at 20% (i.e. 40k tax here)
  • Tax on 5L LTCG (1.25L is exempted, so 12.5% on remaining 3.75L = 46.875k tax here)

Total Tax liability in this case = 40k + 46.875k = Rs.86,875/-

Normal slab rates apply only to income mentioned in point no. 1 above

7

Hi @Jens,

Capital gains from stocks and equity mutual funds are taxed at special rates and not slab rate. Hence, in the example stated, the 3L exemption will be allowed on STCG. The remaining STCG will be taxed at 20% (if gains are realised after 23rd July 2024) and 15% (if gains are realised before 23rd July 2024).

Moroever, for LTCG from stocks and equity MFs, a ₹1.25L exemption will be allowed. The remaining LTCG will be taxed at 12.5% (if gains are realised after 23rd July 2024) and 10% (if gains are realised before 23rd July 2024).

Hope this helps!

8

All the dates in you answer are 23rd July 2023. Did you mean to say 23rd July 2024?

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