FINtastic Women Program International College of Financial Planning
• The Budget 2018 introduced Section 112A by withdrawing Section 10(38). It proposed to impose tax on the LTCG of the following: • a. Shares, • b. Equity-oriented funds or • The LTCG tax is applicable at a rate of 10% on gains over and above Rs 1 lakh a year, and there is no benefit of indexation. FINtastic Women Program International College of Financial Planning
• A method of determining the Cost of Acquisition (COA) of such investments have been specifically laid down as per the COA of such investments shall be deemed to be the higher of: • The actual COA of such investments; and • The lower of- • Fair Market Value (‘FMV’) of such investments; and • the Full Value of Consideration received or accruing as a result of the transfer of the capital asset i.e. the Sale Price FINtastic Women Program International College of Financial Planning
• Example 1 • Mr X bought equity shares on 15/Dec/2016 for Rs. 10,000. • FMV of the shares was Rs. 12,000 as on 31/Jan/18. • He sold the shares on 7/Aug/2020 for Rs. 15,000. • What will be the long-term capital gain/ loss? FINtastic Women Program International College of Financial Planning
• Cost of Acquisition (COA) • Higher of – • Original COA i.e. Rs. 10,000, and • Lower of – • FMV on 31.1.18 i.e. Rs. 12,000, and • Sale Price i.e. Rs. 15,000 • Hence, COA = Higher of (Rs. 10,000 or Rs. 12,000) = • Rs. 12,000 • Capital Gain/ (Loss) • Sale Price – Cost of Acquisition • Rs. 15,000 – Rs. 12,000 • Rs. 3,000 FINtastic Women Program International College of Financial Planning
INCOME FROM OTHER SOURCES FINtastic Women Program International College of Financial Planning
• Winnings from lotteries, etc. • Following winnings shall be taxable u/h IOS: • Lotteries • Crossword puzzles • Races including horse races • Card games & other games (includes game show like KBC) • Gambling or betting • Such winnings are taxable at special rate of tax @ 30% - FINtastic Women Program International College of Financial Planning
DIVIDEND • Dividend received from equity shares and mutual funds is taxed as per tax slab from F.Y. 2020-21. • TDS is deducted by companies and mutual funds @ 10% but due to corona only 7.5% till 31-3-2021. • You can say now dividend is taxable . FINtastic Women Program International College of Financial Planning
SOME INCOME interest e.g. interest on loan, interest on FD, interest on saving bank a/c, etc. Interest on Post Office Saving Account – exempt to the extent of Rs.3,500. FINtastic Women Program International College of Financial Planning
1. Family Family pension means a regular monthly amount pension payable by the employer to the family of an employee in the event of his death. Rs.15,000 or 1/3rd of such pension, whichever is lower, is exempt. FINtastic Women Program International College of Financial Planning
SUM/PROPERTY RECEIVED BY INDIVIDUAL OR HUF AS GIFTS A. Taxation of Cash Gifts Sum of money received by Individual or HUF Without consideration In excess of ` 50,000/- in a previous year the whole of such sum Shall be included in income of receiver under head I/O/S FINtastic Women Program International College of Financial Planning
• Sum of Money received from following will not be included in Income • a. From RELATIVE • b. On Marriage of Individual. • c. Under will or inheritance. FINtastic Women Program International College of Financial Planning
SOME MORE EXAMPLE • Income from sub-letting of a house property by a tenant • Insurance commission • Interest on bank deposits • Interest on loan • Interest in unrecognized provident fund • Rent from a vacant piece of land FINtastic Women Program International College of Financial Planning
SET OFF CARRY FORWARD AND SET OFF Same Nature of source & Inter-source Losses same head & same head Inter-head A/Ys Against*** N.A. N.A. Salary N.A. N.A. N.A. 8 years Same head 8 years Same head a(Max:Rs 2 4 years Same source No limit Same source House Property a a lakhs)) 8 years Same source 8 years Same head PGBP a(except N.A. N.A. Non-speculative a a Salary) Specultive Specified a x x Business (Section 35AD) a x x Capital Gains LTCL a x* x STCL x aa Other Sources Lottery** N.A. N.A. N.A. Owning & Maintaining race horse** a X x 4 years Same source 8 years Same head Other losses a a x
FINtastic Women Program International College of Financial Planning
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