It's time to get your income and investment proofs ready to ensure a hassle-free tax filing. I will try to address your tax queries to make your ITR Filing easy. Here are the top questions which have stumped taxpayers for a long time. Let's get the solutions right Away and axe taxes immediately.
Should I opt for the old or new income tax regime?
The new income tax regime has more slabs with lower tax rates, and all the major tax exemptions and deductions used by the taxpayers in the existing tax regime are not allowed in the new tax regime. There is no fixed category of taxpayers for whom you can specify which tax regime is better. It varies depending on the amount of tax deduction or exemption you claim in a particular financial year and which income tax slab you fall. Therefore, if the advantages of lower tax rates in the new tax regime outweigh the benefits of the tax deductions and exemptions available under the existing income tax regime, the taxpayer can choose the new tax regime.
How are capital gains from Sovereign Gold Bonds (SGBs) taxed?
SGBs are redeemable after eight years at prevailing gold market rates. However, investors can redeem SGBs before the maturity period of eight years but only after five years from the bond issue date. Moreover, investors can buy/sell SGBs over the stock exchange (secondary market). Let's understand how SGBs are taxed in these scenarios:-
(i) On Maturity - No tax on capital gains.
(ii) Early redemption (between five to eight years) - LTCG is taxed at 20% with indexation.
(iii) Sale on the stock exchange -
- Before three years- STCG is taxed based on the applicable income tax slab rates.
- After three years - LTCG is taxed at 20% with indexation.
If I receive a crypto gift, do I need to pay tax on it?
The Finance Bill 2022 clarifies that cryptocurrencies received as gifts will also have similar tax implications as other gifts. The crypto gifts you receive without consideration or inadequate consideration shall be taxed. When their value exceeds Rs 50,000 in one financial year, the entire value of the crypto gift will be taxable in the hands of the recipient at 30%. Crypto gifts received from specified relatives or on specified occasions are tax-free.
My income is below the basic tax exemption limit. Do I need to pay tax on crypto gains?
The gains from the transfer of crypto-assets do not qualify for any income tax exemptions and deductions. You must pay tax on every rupee you earn from the transfer of crypto assets. For instance, taxpayers below 60 years of age qualify for a basic tax exemption of Rs 2.5 lakh. However, small investors who otherwise escape the tax net will incur tax on their cryptocurrency income. For example, you will have to pay tax on cryptocurrency gains at 30% even if you fall within the basic tax exemption limit.
Do I have to pay tax on IPO gains?
The tax on the gains from the sale of shares allotted in the IPO depends on the share-holding period. If you sell shares within a year of listing, such gains are treated as short-term capital gains. However, if you sell these shares after one year of IPO listing, the gain on the sale of such shares is qualified as a long-term capital gain. Hence, if you sell the shares on a listing day, it will be a short-term capital gain and taxed at 15 percent with applicable cess. However, long-term capital gains on the sale of listed shares are taxed at 10% on gains above Rs 1 lakh.
From The Authors Desk: Every effort has been taken to make this article short and precise so that one can get answers to the general queries one has at the time of return filing, any suggestions and improvements will be welcomed and highly appreciated.
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