Long Term Capital Gain taxation for equity

Malarraj · October 2, 2019, 12:12pm

Friends, I have a LTCG of more than 10 lakhs from the equity for this year.

Is there a way to avoid tax?. If Yes how?
If No. Do I have to pay the tax in advance?. If I don’t pay tax in advance,what will be the penalty/interest percentage I have to pay during my tax filing in 2020

Thanks in advance

Curious-Investor · October 2, 2019, 1:38pm

@Quicko

Quicko · October 3, 2019, 1:09pm

Hi @Malarraj,

LTCG up to INR 1 Lakh is exempt from taxes. LTCG above INR 1 Lakh is taxable at 10%.

You can set off against non-speculative business loss like F&O for the current year. Long-term capital losses for previous as well as the current year.
Yes, you are required to pay advance tax in case your tax liability is more than INR 10,000 for the FY. The penalties for non-payment of advance tax are:

Non-payment of Advance Tax u/s 234B: Interest at 1% in case the taxpayer fails to pay 90% of the tax liability in the same FY
Delay in Payment of Advance Tax u/s 234C: if there is a delay in tax payment than interest @ 1% is applicable.

niranjan77 · October 4, 2019, 10:36am

small question, ELSS funds included for 10% LTCG?

Malarraj · October 4, 2019, 4:18pm

Thanks a lot for your response. Appreciate it. It’s pretty clear

One more question related to this. Do we have to pay advance tax for Short term capital gain as well?.

Quicko · October 9, 2019, 1:33pm

Hi @niranjan77,

If ELSS funds consist of listed equity shares then STT (Security Transaction Tax) would have been paid and the LTCG above INR 1 lakh is taxable at 10%.

Quicko · October 9, 2019, 1:36pm

Hi @Malarraj,

Yes, Advance Tax is required to be paid on Short term capital gains.
You can refer our article on Advance Tax for details.