Income Tax Return: Those who haven't filed their ITR have got ample time to use the income tax calculator and find out various ways to save money.
The deadline for Income Tax Return (ITR) filing for FY2019-20 has been extended to 30th November 2020. So, those who haven't filed their ITR have got ample time to use the income tax calculator and find out various ways to save money. According to tax and investment experts, if someone has investments in equities, then money that is meant to go as income tax on long term capital gains (LTCG) can be saved. This can be on up to Rs 2 lakh and the trick is simple - by investing in the name of spouse too.
On how a spouse can help an investor save income tax on equity investment, Mumbai-based tax and investment expert Balwant Jain said, "As per Section 112A a person can claim an initial exemption up to Rs 1 lakh on long-term capital gains (LTCG) arising on sale or transfer of listed equity shares or units of equity oriented schemes every year provided Security Transaction Tax (STT) has been paid. Since this exemption can be claimed by each tax payer, the investments can be made in the names of both the spouses so as to avail the benefit of this exemption every year as long as it is possible."
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Advising an equity investor to divide equity investments equally with spouse, Kartik Jhaveri, Director — Wealth Management at Transcend Consultants said, "One should have an equal division of equity investment with one's spouse so that Long Term Capital Gain Tax (LTCG Tax) cen be avoided for longer period of time. However, after a certain period of time, both of them will have a higher investment portfolio in the equities and in that case, both of them will have to pay LTCG, but that still would allow both the taxpaying partners to save income tax on up to Rs 2 lakh per annum on LTCG Tax."
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