More on Capital Gains Tax Arnav Pandya There is a need for the individual to ensure that they are keeping proper records of their dealings because the new income tax returns in some cases call for extra information. This would not be available unless and until the individual has done their homework and kept the details ready. Otherwise, there could be a last minute rush and problems in trying to recover the details that are required and this can be a problem. With the time still available till the filing of returns it would be better that the individual is able to ensure that they work and get the details ready. Here is a look at the situation on the capital gains front and what would have to be done. Capital gains There are two types of capital gains that are earned by the individual. This is short term capital gains and long term capital gains. Depending upon the asset that is present with the individual the time period the classification of the asset and the gains into long term or short terms is either 12 months or 36 months. For assets like stocks and mutual funds it is 12 month while other assets like property the figure would be 36 month. There is another complication present in the process which is that there can be a capital loss that can be present and if this is the case then there would have to be adjustments against capital gains where this would be possible. There are also different rates of taxes that are applicable for capital gains earned from different areas and hence this would need to be segregated. For example if there is an equity oriented fund then the short term capital gains tax is 15 per cent while the rate depends upon the tax slab that the individual falls under as the figure is added to the income in case it is a debt oriented fund. Segregation Earlier the segregation and separation of the capital gains as a break up into the short term and long term capital gains would be done for the purpose of the tax calculations and to ensure that the workings were appropriate. Now under the new rules for ITR 2 there is a need for segregation of the gains under several heads and its mention too in the tax return form so that the right figure is visible and the details can be clearly known. This will ensure that the gains are properly classified in all the appropriate areas so that the right percentage of tax can be levied on them. This will also require that the individual has the exact details that will have to be mentioned under each of the head and then this would lead to the tax calculations. Once the segregated amount is mentioned then this has to be based on the right classification so a proper working for this would have to be present. Homework The way in which the individual should start their effort is by ensuring that each of their capital gains workings are appropriate and that they are segregated according to the requirements of the tax returns. This is nothing different as what they individual would have to do in terms of calculation of the amount of tax that they have to pay and hence this is something that should be present with them, What is required is that the details need to be mentioned separately and hence there should not be any problems in getting the individual figures for the taxpayer as these should be ready in the manner and form that they are required. This is the reason why the homework done at the current stage would turn out to be useful later on. Read more at: moneycontrol/news/tax/didyouknowaboutcapitalgainsfromtaxreturns_1103985.html?utm_source=ref_article
Posted on: Wed, 25 Jun 2014 02:24:11 +0000
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