Short term and long term capital gains
2
Common mistakes while filling of Short Term and Long Term Capital Gains in ITR form Income from Short Term Capital Gains should be entered in Item A of Schedule CG-Capital Gains. o Out of value auto-populated in column "Total STCG", amount of capital gain attributable to Short Term Capital Gains from sale of equity share in a company or a unit of an equity oriented mutual funds which typically should be entered in any column namely, 'STCG under section 111A included in 4'. o Moreover, the STCG under 111A as entered in column referred above is taxed at a lower flat rate of 10% o The residual value, where the STCG is due to sale of assets other than Equity Shares in a Company or Unit of an Equity Oriented Mutual Funds, if any will auto populate in column as 'Short term capital gain’ other than referred to as in section 111A o The STCG due to sale of assets other than equity share in a company or a unit of an equity oriented fund is taxed at the normal slab based rates of tax. o Most mistakes in STCG are due to incomplete filling of Schedule Capita Gain, incorrect apportionment of Total Short Term Capital Gains into Short Term Capital Gains on which Section 111A is applicable & STCG on which Section 111A is not applicable. Income from Long Term Capital Gains should be entered in Item B of Schedule CG-Capital Gains. o For Long Term Capital Gain (LTCG), the total value of consideration received for assets sold such as house property etc, typically, should be entered in Column 'Other Assets for which option under proviso to section 112(1) not exercised' in case the benefit of indexation is claimed. o Against this value of consideration received, the indexed cost of acquisition / improvement and allowable expenditure etc should be entered in appropriate columns provided thereafter. o Appropriate exemptions shall be entered in Column provided there in and the amounts will populate automatically wherever necessary. o LTCG in case of 'Asset in the case of others where proviso under section 112(1) not exercised' Column of ITR 2 is taxed at a flat rate of 20% and the benefit of indexation is allowed. o Where benefit of indexation is NOT claimed then total value of consideration received for assets transferred, should be entered in 'Other Assets for which option under proviso to section 112(1) exercised' column. o Against this consideration, the cost of acquisition / improvement and allowable expenditure etc should be entered in relevant columns provided in Schedule CG. o The appropriate exemptions, if any, are filled in column provided for the same & amounts will auto populate automatically wherever necessary. o LTCG in case of in 'Other Assets for which option under proviso to section 112(1) exercised', where the benefit of indexation is NOT allowed, as being displayed in the named column is taxed at a lower flat rate of 10%.
-
Upload
taxfreemart -
Category
Services
-
view
79 -
download
5
description
Common mistakes while filling of Short Term and Long Term Capital Gains in ITR form. Visit us at www.taxfreemart.in for more details.
Transcript of Short term and long term capital gains
Common mistakes while filling of Short Term and Long Term Capital Gains in
ITR form
Income from Short Term Capital Gains should be entered in Item A of Schedule CG-Capital Gains.
o Out of value auto-populated in column "Total STCG", amount of capital gain attributable to Short Term Capital Gains from sale of equity share in a company or a unit of an equity oriented mutual funds which typically should be entered in any column namely, 'STCG under section 111A included in 4'.
o Moreover, the STCG under 111A as entered in column referred above is taxed at a lower flat rate of 10%
o The residual value, where the STCG is due to sale of assets other than Equity Shares in a Company or Unit of an Equity Oriented Mutual Funds, if any will auto populate in column as 'Short term capital gain’ other than referred to as in section 111A
o The STCG due to sale of assets other than equity share in a company or a unit of an equity oriented fund is taxed at the normal slab based rates of tax.
o Most mistakes in STCG are due to incomplete filling of Schedule Capita Gain, incorrect apportionment of Total Short Term Capital Gains into Short Term Capital Gains on which Section 111A is applicable & STCG on which Section 111A is not applicable.
Income from Long Term Capital Gains should be entered in Item B of Schedule CG-Capital Gains.
o For Long Term Capital Gain (LTCG), the total value of consideration received for assets
sold such as house property etc, typically, should be entered in Column 'Other Assets for
which option under proviso to section 112(1) not exercised' in case the benefit of
indexation is claimed.
o Against this value of consideration received, the indexed cost of acquisition / improvement and allowable expenditure etc should be entered in appropriate columns provided thereafter.
o Appropriate exemptions shall be entered in Column provided there in and the amounts will populate automatically wherever necessary.
o LTCG in case of 'Asset in the case of others where proviso under section 112(1) not exercised' Column of ITR 2 is taxed at a flat rate of 20% and the benefit of indexation is allowed.
o Where benefit of indexation is NOT claimed then total value of consideration received for
assets transferred, should be entered in 'Other Assets for which option under proviso to section 112(1) exercised' column.
o Against this consideration, the cost of acquisition / improvement and allowable
expenditure etc should be entered in relevant columns provided in Schedule CG. o The appropriate exemptions, if any, are filled in column provided for the same &
amounts will auto populate automatically wherever necessary. o LTCG in case of in 'Other Assets for which option under proviso to section 112(1)
exercised', where the benefit of indexation is NOT allowed, as being displayed in the named column is taxed at a lower flat rate of 10%.
o The assessee is required to segregate the information date wise in Column D of Schedule Capital Gain regarding Accrual or Receipt of Capital Gain failing which Interest under Section 234C will be wrongly calculated.
Adjustment of current year and brought forward losses- Schedules BFLA, CYLA and CFL, taxpayers have left these Schedules blank. Schedules are required to be used for permissible adjustment of loss of one head of income against another head of income. Main checkpoints are:
o Only positive values need to be put. No ‘negative’ value is to be entered either in CYLA, BFLA & CFL.
o Carry forward of Current year losses though claimed in return will not be allowed if the return is not filed within due date.
o No value should be entered in the 'Greyed out' boxes. o The Amounts in Schedule CYLA/BFLA will populate, however assessee will be
allowed to claim loss in Schedule BFLA only if appropriate columns have been entered in Schedule CFL.
o It is to be noted that the newly introduced Schedule namely Schedule UD currently is not linked with Schedule Brought Forward Loss (BFLA), therefore all the assessee are required to mention the Brought Forward Depreciation amount separately in Schedule BFLA for claiming the loss arising from the same.
Income chargeable to Income tax at special rates- Schedule SI Most mistakes have occurred in this Schedule since taxpayers have not correctly filled codes, rates or values. Following points may be considered:
o Currently the Income Tax forms do not have Individual Columns for segregating DTAA income from Non DTAA income under each head of income therefore; taxpayer are advised to give details of DTAA income & Tax thereon in Schedule SI.
o Any special income other than Capital Gains income the figures for which auto populate from Schedule CG, the assessee is required to mention it in Schedule SI only & that income shall not be specified separately under any other head.
