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Capital Gain Tax , Freelance Income & Tax Slab

Parshuram Prabhu (IT Freelance Recruiter ) (23 Points)

09 April 2021

I have income from freelance recruitment and income from LT gain on sale of listed shares and all are below 250000, so which ITR to be filed and will there be a tax if capital gain tax exceeds 1 lakh and if below income tax slab. I was filing my return under ITR2 as was not having any freelancing income.

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8 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 09 April 2021

LTCG arises from sale of shares is exempt upto 100000 rupees u/s 111A. File ITR 2 return. In your case income is less than basic exemption limit so no tax liability is arises

CMA Poornima Madhava (CMA) (13097 Points)
Replied 09 April 2021

1) Being a freelance recruiter, you are into profession and such income would be taxable under profits/gains from business & profession. 2) As far as LTCG is concerned, no tax even if such gains exceed ₹1 lac provided the total income is within the basic exemption limit of ₹2.5 lacs 3) You may use ITR3

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 09 April 2021

LTCG arises from sale of shares is exempt upto 100000 rupees u/s 112A.

Ankit Neema (2742 Points)
Replied 09 April 2021

ITR 3 OR ITR 4 WILL APPLICABLE, AND YOU MUST FILE YOUR RETURN EVEN THOUGH YOUR INCOME IS UNDER 2.5L, AS YOU HAVE SHARE TRADING YOU MUST FILE YOUR RETURN .

Parshuram Prabhu (IT Freelance Recruiter ) (23 Points)
Replied 10 April 2021

I have filed my return under ITR 2, as was not having any freelancing income. I was filing under ITR 2, so this time wanted to know whether ITR3 or ITR4 is applicable and can LTCG can be clubbed under Income Tax Slab.

CMA Poornima Madhava (CMA) (13097 Points)
Replied 10 April 2021

ITR4 cannot be used in case of capital gains. So ITR3 is appropriate here. LTCG can be included within the basic exemption limit and no tax would be payable.