Latest Expert Exchange Queries

Make your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARDS :: articles on VAT and GST in India :: TAX RATES - GOODS TAXABLE @ 4% :: cpt :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: form 3cd :: ACCOUNTING STANDARD :: VAT RATES :: list of goods taxed at 4% :: TDS :: Central Excise rule to resale the machines to a new company :: due date for vat payment :: VAT Audit
 
 
« General »
 Accounting relief for IndAS companies
 How you can reduce your tax to zero if you have income within Rs 10 lakh
 NRIs’ overseas bank info needed only for tax refund
 Non-performance: I-T dept transfers 245 commissioners
 Income Tax efiling: Tax implications resulting from clubbing of income
 Guidelines for selection of cases for scrutiny during the financial-year 2017-2018-regd
  GST: How companies are gaming the system
 Goods And Services Tax transparency: Elimination of added taxes to boost investment in realty
 In a first, Income Tax department to charge govt official under new benami law
 Income Tax Return Filing: 10 common mistakes people make while filing return of income
 Income Tax efiling: A few essential facts for senior citizens to keep in mind

Bringing down capital gains tax for individuals
September, 24th 2013

There are two ways in which a capital gains tax can be minimised or even brought down to zero. One is to fulfill conditions that allow for a lower rate and the other is to reinvest amounts where the tax can be reduced or eliminated. The investor has to look carefully and then decide on the route that they are going to take to ensure that the tax impact comes down.

This is significant because the choice of the way that they go about it will require them to undertake several steps and this will generate small points that need attention. Here is how this can be done and the difference between the approaches that will be used. Zero rate on gains One of the ways to go about reducing the tax element on capital gains is to ensure that there is a zero or a lower rate of tax on the capital gains that are earned by the investment.

This is not possible under all circumstances so it has to be seen how this can actually come about because it will require some effort as well as planning. In case of equity oriented instruments like shares and equity oriented mutual funds there is a zero rate of tax on long term capital gains so the effort here is to ensure that the gains come in after the holding period crosses the one year mark.

This will ensure that the gains fall under the specific section and this will get classified with the beneficial rate of tax. The reduction in the liability at this stage ensures that the question then of paying the amount does not arise. In other cases like debt investments there could be an effort to ensure that the lowest rate possible especially on long term gains can be seen.

This ensures that the tax liability even when the amount has to be paid then the figure is minimised to the extent possible. The benefit here comes from the fact that the gains itself have a lower rate applicable as compared to other alternatives so they save tax for the individual. Saving tax later The other way in which the benefits can be taken is through ensuring that once the capital gains are earned then there could be additional efforts to ensure that the tax there is reduced.

This will require the individual to undertake some special efforts. There are a lot of ways in which the capital gains that are taxable can be saved and hence these routes need to be considered. Some of the ways in which this can be done is by investing in another residential property within a certain time period or buying specific bonds upto Rs 50 lakh in a year. One of the points to be noted is that this will be available only for long term capital gains so the nature of the gains also occupies a significant spot in the whole action.

The important thing here is that this would be based upon some working and calculations that need to be done initially to figure out what is the amount that has to be invested to eliminate the tax. There are specific gains that have been earned and then the investments into the additional areas would lead to a reduction in the tax bill but in some cases there would be restrictions on the extent of the amount available for investments.

There could be a position wherein the entire gains are eliminated or it could be that a part of the gains are saved and the remaining ones are taxable. The exact position is important in terms of the final impact that will actually be witnessed by the investor at the end of the day.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Application Management Solutions Application Management System Application Management Software System Application Management Development Application Management Software Development

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions