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Can i declare LTCG income as business income if I am quitting the job mid-year.

Tax planning 383 views 1 replies

Amit Kulkarni

1 Points Joined November 2024

Hi,

I am a salaried person. I am planning to quit my job in May 2025.

And sell off some of my long term stock holdings.

Can I declare the gain as business income?

Because the salary I receive will be minimal and it will be benefitial for me to declare the Long term gain as business income.

Replies (1)

Rama chary Rachakonda

Master in Accounts & high court Advocate

9610 Points Joined December 2011

As a salaried individual, you cannot declare long-term capital gains from selling stocks as business income. Long-term capital gains are taxed separately under the Income-tax Act, 1961, and are not considered business income. Business income refers to income earned from a business or profession, whereas long-term capital gains arise from the sale of investments held for more than 24 months. The tax treatment and rates for these two types of income are different. Declaring long-term capital gains as business income is not permissible and may lead to legal issues. Instead, you should report the long-term capital gains in your tax return and pay tax accordingly. However, you may consider consulting a chartered accountant or tax advisor to explore legal ways to minimize tax liability on your long-term capital gains. They can help you understand the tax implications and suggest appropriate strategies. Some possible options to minimize tax liability on long-term capital gains include: - Indexation benefits - Exemptions under Section 54EC or 54F (if applicable) - Offsetting capital losses against capital gains - Considering tax-loss harvesting s

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