LTCG for 0 income earners

Taxation
1

Hi guys,

I have investments under my parents name and they do not have any other income except for LTCG and STCG.

I know that we have deduction of up to 1.25L of LTCG per annum and no deductions for STCG unless we have any losses which in my case is 0.

I have read in this forum at some places that when an individual have no other income they can add their LTCG as regular income and be exempt up to 4L of investment.

My questions are

  1. Do we have this flexibility in the new tax regime
  2. If we can show it as a normal income can it be taken upto 12L per annum according to new budget rules
2

@kvnreddy

  1. No
  2. Absolutely No
1 Like
3

@CA_Anand_Thakor

So I am assuming this is only available on the old tax regime is that true?

4

@kvnreddy
Not true,

1 Like
5

@Quicko
i guess

  1. is correct
  2. not true
6

Hello @kvnreddy

LTCG is taxed under the head Capital Gains and taxed at special rate of Income i.e 12.5% without indexation. The government also gives a benefit of 1.25 lakhs against LTCG means there will be no tax if LTCG is upto 1.25 lakhs.

However, if we consider your income situation where your parents do not have any other income apart from LTCG, you can also avail the basic exemption limit of 4 lakhs against the LTCG which means there will be no tax under new tax regime if your LTCG income is up to 5.25 lakhs in a financial year.

Please note that the above exemption limit of 4 lakhs shall be applicable from FY 2025-26 i.e. when you file return for that period in AY 2026-27.

Thank you.

5 Likes
7

Exactly - However, do note that this is 4 Lakh basic exemption limit is applicable only for Resident Indians and Not for Non Residents.

2 Likes