In this post, we will show you the working of Capital Gains in Saral Income Tax with screenshots to explain the process in detail.
To begin with, the capital gain is any profit or gain that arises on the sale of an asset. This gain comes under the income, and hence tax needs to be paid for that amount of gain in the year in which the transfer of the capital asset takes place. This is called the capital gains tax.
Capital Gains are of two types:
- Short Term Capital Gains – An asset which is held for a period of 36 months or less. In case of immovable properties such as land, building and house property, the criteria of 36 months are reduced to 24 months from FY 2017-18.
- Long Term Capital Gains -An asset which is held for a period of more than 36 months.
Now, we will see how capital gain details can be entered in Saral Income Tax for ITR purpose.
To enter the details, go to Capital Gains option in Tax Meter.
Capital Gains option is not available in the selected ITR is ITR1 or ITR4.
The dashboard of Capital Gains will be displayed. This is a view screen which will display the details entered in STCG (Short Term Capital Gain) and LTCG (Long Term Capital Gain) screen and show what will be the Taxable capital gain income.
To enter STCG, click on S T C G option in the Tax Meter. In the displayed screen, the details can be entered as applicable.
The STCG is further divided as Securities, Other Than Securities, Deemed Capital Gain and Pass-through Income.
STCG in Securities is the gains that arise from the sale of assets like shares, bonds etc. On selecting Securities option, the related type of assets will be listed from the dropdown. Select the applicable asset and provide the related information like Sec111A Applicability, Sale data and amount, selling expenses etc.
Also to be entered is a loss if any under applicable sections and DTAA applicability.
STCG in Other than Securities are the gains that arise from the sale of assets like land, building etc. On selecting Other than Securities option, the related type of assets will be listed from the dropdown. Select the applicable asset and provide the related information like Sale data and amount, Selling expenses, Year of Acquisition etc.
For STCG in Deemed Capital Gains, click on the option and enter the details in the window displayed.
Deemed Capital Gains will arise when any exemption claimed in respect of Capital gains in the previous year will be taxable subsequent year due to violation of exemption condition. In such a case, the amount claimed as the exemption will be taxable in the current year.
If any Pay Through Income is available in STCG, then click on the button and enter the relevant details like Business Trust Name, PAN etc.
Pay Through Income is income that is invested at a certain class of organisations called business trust. Certain incomes of these trusts are not taxable, instead, is taxable in the hands of persons who have invested in these trusts. Since it is not the direct income of such investors; it is called Pass-Through Income.
To enter LTCG, click on L T C G option in the Tax Meter. In the displayed screen, the details can be entered as applicable.
The LTCG is further divided as Securities, Other Than Securities, Securities – 112A, Deemed Capital Gain and Pass-Through Income.
For any gain from Securities u/s 112A, select the type from the dropdown and enter the relevant details.
Budget 2018, saw the withdrawal of Sec 10(38 with a parallel introduction of Section 112A to tax LTCG on sale of:
- Equity shares
- Units of equity-oriented funds or
- Units of business trusts
at a concessional rate of 10% on gains in excess of Rs. 1 lakh without providing the benefits of indexation or the benefit of computation of capital gains in foreign currency in the case of non-residents.
The summary of the details entered can be viewed on the main screen of Capital Gain and the Taxable Income from Capital Gains will also be displayed.
The special rate of tax computed on these capital gains can be viewed at Total Tax in Tax Meter.
This completes the process of Capital Gains in Saral Income Tax.