Your Queries: Income Tax

The Income Tax provisions prescribe taxation of long term capital gains at 20% (including surcharge and cess as applicable

By Chirag Nangia

Last financial year, I made long term capital gains (LTCG) of Rs 2 lakh from mutual funds and booked long term capital loss (LTCL) of Rs 2 lakh from direct shares. While filing return where do I need to show the gains and losses so that losses from shares can be set off against gains from MF.
—Sumitabha Banerjee
Any LTCG arising on transfer of debt mutual fund shall be taxed u/s 112 at 20% whereas LTCG on transfer of units of equity-oriented mutual fund shall be taxed at the rate of 10% (without indexation), if such gains are in excess of Rs 1 lakh in a financial year and Securities Transaction Tax (STT) has been duly paid.

For A.Y. 21-22, you have to file ITR-2/3 wherein under schedule CG, you have to furnish details pertaining to sale transactions of your securities. Details pertaining to sale transaction of equity share or unit of equity oriented fund on which STT is paid will have to be furnished under Schedule 112A for calculation of resultant gain/loss. The gain/loss so calculated shall be auto-populated in Schedule CG.

How is capital gains tax is calculated with reference to selling of land?
—Venkataraman T N
For tax purposes, immovable property, i.e., land or building is classified as long-term capital asset if it is held for a period exceeding 24 months, else, it is regarded as short term capital asset. In order to compute capital gains on transfer of land, cost of acquisition, cost of improvement and expenses (incurred wholly and exclusively in connection with the transfer) are to be deducted from the sale consideration. Cost of acquisition and improvement is allowed to be indexed in case of long-term capital assets.

For this purpose, central government has notified cost inflation index. The Income Tax provisions prescribe taxation of long term capital gains at 20% (including surcharge and cess as applicable).

I have got compensation amount of Rs 45 lakh from my employer. Income tax of Rs 12 lakh has been deducted. Please let me know the legal ways to claim the income tax refund
—Manjunath
You must file the relevant ITR and declare this income. Any excess of TDS over the final tax liability shall be refunded by the income tax department after processing of the return.

The writer is director, Nangia Andersen India. Send your queries to fepersonalfinance@expressindia.com