Hi,
Let’s say I’ve Short term realized profit of 80,000 Rs. Short-term capital gains are taxable @15%.
15% of 80,000 is 12,000.
If I invest 12,000 in an ELSS Mutual Fund or pay Health insurance premium, will I will pay tax now?
Can 80C be set off against capital gains tax from equity?
Hi @rahul8,
ELSS investments do qualify for deduction u/s 80C, however, Chapter VI A deductions like 80C, 80D etc. are not eligible for special rate incomes such as short-term capital gains u/s 111A and long-term capital gains u/s 112A.
Is their any way to save taxes on long-term capital gains?
I asked my CA, he said if we invest in residential real estate we can save taxes on long-term capital gains on Stocks and MF. Is this correct info? If yes, then please explain briefly how it works.
Thanks!
Hey @rahul8,
Yes, you can claim an exemption under section 54F. This section allows you to claim a tax exemption when you sell stocks and reinvest the proceeds in buying or constructing a new residential property.
Here’s a detailed read on the same:
Hi @Quicko
Can you kindly re-confirm
the following restriction that is mentioned in the above article?
The taxpayer also should not purchase any other house within 2 years or construct within 3 years after the date of transfer (apart from the new asset for exemption).
However, upon careful review of the Section 54F of the Income Tax Act,
it appears that the actual condition is that
one must NOT purchase/construct another residential house for 2/3 years,
the income from which is chargeable under the head “Income from house property”.
i.e. purchasing/constructing another house
within the stipulated period
on its own is NOT a restriction,
as long as one does NOT receive any income from it.
Refer highlighted sub-sections, clauses, and explanation -
Source: Section 54F of the Income Tax Act.
Could you please review and confirm or clarify the above?
BTW, the same clarification is also being discussed recently in this thread ,
and is still awaiting clariication from Zerodha Varsity folks.
