SAVE Capital Gains Tax on STCG and LTCG | Tax Harvesting on Profits

How to SAVE Capital Gains Tax on STCG and LTCG | Tax Harvesting on Profits (Hindi)
In this video by FinCalC TV we will see how to save capital gains tax on STCG and LTCG with calculation examples in hindi. We will also see how tax harvesting works and how you can save income tax on short term and long term capital gains which is 20% and 12.5% respectively.

STCG Tax Calculation Video

Tax Harvesting to save LTCG Tax:

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What is Capital Gains
Profits or gains arising from transfer of a capital asset are called “Capital Gains” and are charged to tax under the head “Capital Gains”.

Example: When you sell shares or equity mutual funds and you make profits after selling these units, it is called capital gains. Also, when you buy land and sell it to make profits, it is called capital gains. When you make losses while selling such assets, it is called capital loss.

What is Short Term Capital Gains
Any capital asset held by the taxpayer for a period of not more than 36 months immediately preceding the date of its transfer will be treated as short-term capital asset.

For shares of companies or equity mutual funds the period is 12 months. So shares or equity mutual funds sold within 12 months from the date of purchasing and making profits on such selling will be termed as Short Term Capital Gains.

To make it simple we will talk about STCG on shares or equity mutual funds in this article to understand the examples more clearly.

Long Term Capital Gains Tax or simply LTCG Tax is the income tax you pay when you hold the shares or equity mutual funds for more than 1 year and sell them after this holding period. 10% tax is applied on such LTCG or profits made above Rs. 1 Lakh in financial year. We will check LTCG Income Tax on SIP with the help of examples. While on other hand, STCG or Short term capital gains attracts 15% tax on the profits made. We can also save LTCG tax by dividing the profits across multiple financial years, known as Tax Harvesting.

Long Term Capital Gains Tax Rate
Long Term Capital Gains Tax rate is 10% on profits made above Rs. 1 lakh. Here we are talking about equity related assets that include shares and equity mutual funds.

So instead of adding the LTCG profits in your total income, the LTCG profits are taxed separately and 10% tax is applied on profits made above Rs. 1 lakh in financial year.

LTCG Tax Example:
So let’s say in a financial year, you made LTCG profits of Rs. 90,000. In this case, since the profits is below Rs. 1 lakh in financial year, there will be no tax liability.

But if you make LTCg profit of Rs. 1,10,000 in financial year, 10% tax will be applied on profits above Rs. 1 Lakh and will be calculated as below:

LTCG Tax = 10% * Profits above Rs. 1 lakh / 100
LTCG Tax = 10% * Rs. 10,000 / 100
LTCG Tax = 10% * Rs. 1000
So Rs 1,000 + cess will be your tax liability on above mentioned profits made in financial year.

#CapitalGains #SaveIncomeTax #MutualFunds #fincalc

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DISCLAIMER:
Examples and demo used are for Illustration purpose only and might not cover every detail of examples shown.
I Am Not A SEBI Registered Adviser. All The Information Provided By Me Are For Educational/Informational Purposes Only. We Do Not Take Any Responsibility For The Accuracy Of The Data But As It May Contain Typographic Or Other Errors And Inaccuracies And We Expressly Disclaim Liability For Any Errors On The YouTube Channel (FinCalC TV). Please consult your Financial Advisor before taking any decision or action in terms of your Finances.

[spiritualquiz-adhyatmaques]

❤❤ Best video i ever seen. You are genius Sir🙏. You are a talented person.

[damor]

Bahot saral language me bhai ne samjaya thankyou bhai❤

[mdabdulsaahil]

Thank you sir❤ you video was so helpful

[DILIPKUMAR-kmzu]

1.25 lakhs rebate is applicable in single or in each stock please tell me.

[targetcore]

1)Sir simple cheez batao ….. agr busssiness income 2.5 lakh hai after all expense main amount 2.5 lakh. Or ab hum kitne rupess ka short term capital gain book krenge 2/3/4/5/ lakh to tax dena pdega
2) salary person 5 lakh head income hai all deduction katkr to kitna short term book kr sakte hai kitna maaf hoga 1/2/3 lakh
All possibilities for short term capital gain 4/5 condition consider krke deatail mai ek video banaye sir short term capital gain pr

[Shridhar]

Sir But According To New Tax Regime 3 Lacks Hai Na minimum Na Ki 2.5 Lacks

[ravibhushansinha]

3 lakh hai new tax regime me .अगर ltcg में प्रॉफिट 3 लाख है तो Basic exemption 3 लाख के अनुसार कोई टैक्स नही लगेगा ! स्पष्ट करें ? 2. अगर Ltcg और Stcg का अलावा कोई इनकम नही है तो उस कंडीशन में दोनों को मिलाकर अगर इनकम 3 लाख है तो उस पर टैक्स नही लगेगा ! अगर 3 दोनों का जोड़ 3 लाख से ज्यादा होगा तो 3 लाख घटाने के बाद जो अमाउंट होगा उसपर stcg रेट 20% ही लगेगा ! कृपया इसे स्पष्ट करें !

[kunalkuhile]

Only profit cannot be withdrawn from MF, principal amount also gets redeemed with it, so this method of tax harvesting is not correct i guess.

[Degree_]

Meri total income 407560 thi jisme 152250 ka stcg tha 87a ki rebate nahi Mili demand notice aa gaya