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Budget 2017: Capital gains, cut the pains

ExemptionsThinkStock Photos
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Exemptions
If you bought a house two years ago, it's a good time to sell it. The gains from the sale will now invite Long Term Capital Gains (LTCG) taxed at reduced rate of 20%. You'll also be eligible for various exemptions on reinvestment.
Tax implication on incomeThinkStock Photos
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Tax implication on income
1. Equity shares: Dividend up to Rs 10 lakh a year is tax-free. Above that, there's tax at the rate of 10%.
2. Equity mutual funds: Tax-free.
3. Debt mutual funds: Tax-free.
4. Tax-free bonds: Interest from notified tax-free bonds is exempt from tax.
5. Debentures: Taxable, unless notified.
Tax implication on sale (I)ThinkStock Photos
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Tax implication on sale (I)
1. Equity shares
Long Term CG: Exempt (Exemption is available if STT is paid on sale and purchase, in case of equity shares acquired on or after October 1, 2004, subject to certain exceptions notified. STT rates are for delivery-based transactions only).
Short Term CG: 15% (If STT of 0.1% each is paid by the seller and buyer in both cases. STT rates are for delivery-based transactions only).

2. Equity mutual funds
Long Term CG: Exempt.
Short Term CG: 15% (If STT of 0.001% each is paid by seller and buyer in both cases. STT rates are for delivery-based transactions only).

3. Debt mutual funds
Long Term CG: 20% with indexation.
Short Term CG: Tax at slab rate.
Tax implication on sale (II)ThinkStock Photos
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Tax implication on sale (II)
4. Tax-free bonds
Long Term CG: 10% without indexation.
Short Term CG: Tax at slab rate.

5. Debentures
Long Term CG: 10% without indexation.
Short Term CG: Tax at slab rate.
Long Term Capital Gains (LTCG)ThinkStock Photos
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Long Term Capital Gains (LTCG)
Capital gains on sale of all listed securities mentioned earlier (other than debt-oriented MFs), held for more than 12 months, is treated as LTCG. Unlisted securities and immovable property have to be held for more than 24 months to qualify for LTCG. All other types of capital assets, including debt-oriented MFs, sale post 36 months will qualify as LTCG.
Short Term Capital Gains (STCG)ThinkStock Photos
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Short Term Capital Gains (STCG)
When securities (listed/equity oriented MF/zero coupon bonds) are held for up to a year, the gain is treated as STCG. For immovable properties and unlisted securities, holding up to 24 months will qualify for STCG. For all other type of assets, holding up to 36 months will qualify as STCG.
Set-off provisions for capital lossesThinkStock Photos
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Set-off provisions for capital losses
*Loss from transfer of a long-term capital asset can be set off against gain from transfer of any other long-term capital asset in the same year. But, long-term capital loss cannot be set off against short-term capital gains.

*Loss from transfer of a short-term capital asset can be set off against gain from transfer of any other capital asset in the same year.

*Any unutilised capital loss after absorption in the same year can be further carried forward to next eight years and be utilised under the same conditions as above.

*You should file your I-T return before July 31 to carry forward any losses.
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