Long term capital gains tax from equity

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This discussion clarifies the calculation of Long Term Capital Gains (LTCG) tax on equity investments. It addresses whether individual stock profits below £1 lakh are taxable and explains how total profits are aggregated. The conversation also covers the £1 lakh LTCG exemption, tax rates, and how taxable gains are added to annual income for overall tax liability.

NaveeN

NaveeN (Querist)

01 January 2022 Hi, I need a clarity on incometax calculation query ?
NaveeN is a resident individual investing in equity shares . He invested 1 lakh each in 5 diffrent equity stocks. After 1 years he sold all the stocks with 50 thousand profits in each stock sold.
Stock A - 50000 profit
Stock B - 50000 profit
Stock C - 50000 profit
Stock D - 50000 profit
Stock E - 50000 profit

Question 1 : Whether he should need to pay LTCG tax, because in each stock he got profits 50k, not exceeding 1 lakh?

Question 2 : If he need to pay LTCG on total Profits means , first 1 lakh profit is tax free ? 1.5 lakh is eligible for LTCGT?

Question 3: His net salary annual income is 6 lakhs. After paying 10 % LTCG tax on profits ( 15000 tax on l.5 lakh profit) remaining 1.35 lakh profit income should be included in other income? He needs to pay income tax for 6 lakhs or 7.35 lakhs ?

Question 4: what is the net tax he needs to pay?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

01 January 2022 1 LTCG tax payable.
2 yes.
3 Tax payable on 6 lacs.

CA.Pujah

CA.Pujah (Expert)

05 January 2022 Just to add on:
2) Capital gain would be whole 2.5 Lacs=50000x5. One lakh will be automatically reduced later in schedule for Income chargeable to tax at special rates.
3) Tax will be chargeable on 6 lacs annual salary income at slab rate and above LTCG @ 10%

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