Title: HOW TO SAVE TAX ON SHARE MARKET INCOME
1How to save tax on share market income?
- How tax is calculated on share market income?
- Tax planning
- Tax on Stock Market Income for AY 2021-22
- Details about Capital gains required to show in
ITR?
2- How tax is calculated on share market income?
- Tax planning
- Tax on Stock Market Income for AY 2021-22
- Details about Capital gains required to show in
ITR?
3TYPES OF GAINS
- Short term Sale Purchase lt 12 months
- Long term Sale Purchase gt 12 months
- Intra-day Buy and Sale same day
4TAXABLE INCOME TAX HEADS
- Short term Capital Gain head of income
- Long term Capital Gain head of income
- Intra-day Speculative business income (PGBP)
- Dividend income Other sources
5TAX RATES ON GAINS
- Tax is on Profit. Profit Sale price Purchase
price - Short term Capital Gain 15
- Long term Capital gain upto 1 lakh in a year 0
- Long term Capital gain more than 1 lakh 10 on
the excess of 1 lakh - Intra-day Slab rate
- Dividend Slab rate
- Health and Education cess _at_ 4 additional on all
cases
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8Benefit of Loss
- ST / LT can be carried forward for 8 years
- Intra-day for 4 years
- Filing of IT return on time to c/f losses
- ST loss can be set-off against ST OR LT
- LT loss can be set-off only against LT
- Intra-day loss can be set-off only against
intra-day gain.
9How to show in ITR?
- ITR 1 cannot be used.
- Section 111A Short term Capital Gain
- Total of Sale figure of all shares as Full Value
of Consideration in ITR - Total of Purchase figure of all share as Cost of
acquisition - Schedule 112A Long term Capital Gain
- If share bought after 31.01.2018 then
consolidated figures - If share bought before 31.01.2018 then each
shares details along with ISIN code of that share
10How to save tax???
11Trick 1
- Regular trading by your Family member who dont
have any other income Spouse or parents. - Benefit - Basic exemption upto Rs 2,50,000 can be
claimed. - NO TAX on profit made upto Rs 2.50 lakhs every
year.
12INCOME Mr X Mr Y Mrs Y
Salary 7,00,000 7,00,000 -
Short term Capital Gain 2,00,000 - 2,00,000
Total Tax 85,800 54,600 0
TAX SAVING OF Rs. 31,200 (85800-54600)
13How to save tax on big LTCG?
- Individual or HUF
- Currently own no house or just one house
- Invest the total Sale amount in
- Buying one new residential property within 2 year
or construct within 3 years. - This new residential property shouldnt be sold
for next three years.
14HOPE IT HELPS
VINOD K AGRAWAL ASSOCIATES, CA