Sale of Virtual Digital Asset (VDA including Cryptocurrency) should not be considered as a capital gain starting from FY 2022-23 (AY 2023-24) but should be treated as income. Tax on such could be arrived from Crypto Tax Calculator
A comprehensive list of income tax saving investment options in India that every taxpayer should follow, and our detailed analysis including rate of return, risks, rewards @ Income Tax Saving Options
- To Capital Gains Period of Holding Calculator, Visit Capital Gains Period of Holding Calculator
- To know more about capital gains, Visit Capital Gains Tax Guide
- Simulate your Investments from LTCG Gains using Long Term Capital Gains Reinvestment Calculator
Union Budget 2024 simplified the tax the law by changing the holding period and rate of long-term (LTCG) and short-term (STCG) capital gains.
Indexation benefit has been removed on all classes of assets with certain exceptions towards the sales of property (land or building).
A. Gold / RSU / ESOP / ESPP / Unlisted shares / any other assets / Debt Mutual Funds / Immovable Property: Indexation benefit is not available on sale of these assets w.e.f 23rd July 2024. The taxpayers cannot opt for Indexation benefit and they are required to pay 12.5% tax on sale of these assets w.e.f 23rd July 2024
B. Immovable Property (Land or Building): The LTCG calculation for such class of asset is equivalent to 12.5% on the gain without indexation. However, the excess tax will be eliminated when 20% with indexation is taken into account. To qualify this exception, below criteria must be met.
- The property must be acquired prior to and sold after July 23, 2024.
- Applicable only when filing as Resident Individual or HUF
- No loss from the 20% with indexation method would be considered when calculating the tax @ 12.5% or during carry forward losses.
- Maximum tax relief from this method is up to an extent of the CG Tax @ 12.5%
* Above was updated after the Gazette enacted on 16th Aug 2024, the Finance Bill tabled in Parliament.
Latest Capital Gains Rate and Period of Holding for a capital asset can be found using Capital Gains Rate & Period of Holding Calculator
Any capital asset held by a person for a period of less than 36 months immediately preceding the date of its transfer will be treated as short-term capital asset
However, in respect of certain assets like shares (equity or preference) which are listed in a recognised stock exchange in India, units of equity oriented mutual funds, listed securities like debentures and Government securities, Units of UTI and Zero Coupon Bonds, the period of holding to be considered is 12 months instead of 36 months.
In case of unlisted shares in a company, the period of holding to be considered is 24 months instead of 36 months.
In case of unlisted shares of a company or an immovable property being land or building or both. The period of holding to be considered is 24 months instead of 36 months.
NOTE: W.e.f 23rd July 2024, union Budget has standardized the holding period for all capital assets. Any capital asset held by a person for a period of less than 24 months immediately preceding the date of its transfer will be treated as Short -term capital asset.
However in case shares (equity or preference) which are listed in a recognised stock exchange in India, units of equity oriented mutual funds, listed securities like debentures and Government securities, Units of UTI and Zero Coupon Bonds, the period of holding is 12 months.
Capital gain broadly calculated as Capital gain = ( full value of consideration received on transfer) - ( cost of acquisition of capital asset + cost of improvement of capital asset + expenditure incurred in connection with transfer of capital asset).
Signup now to Get a Capital Gains Tax Consultation and / or Expert Assisted IT Filing Service.
Gain arising on transfer of long-term capital asset is termed as long-term capital gain and gain arising on transfer of short-term capital asset is termed as short-term capital gain. However, there are a few exceptions to this rule, like gain on depreciable asset is always taxed as short-term capital gain.
The benefit of indexation is available only in case of long-term capital assets and is not available in case of short-term capital assets.
W.e.f 23rd July 2024, the benefit of Indexation is partially available. The indexation is available only for Resident individuals or HUF w.e.f 23rd July 2024 and the property should have been purchasedSune before 23rd July 2024 to take the benefit of Indexation. Also the taxpayers cannot claim any losses from Indexation.
Any Virtual Digital Asset (including Cryptocurrency) is generally considered as a capital asset until 2022 in India. During Budget 2022, it was announced that the cryptocurrency is considered as a 'special asset' where the tax rate applicable would be 30%without indexation, without expenses, without set-off against any income within the year, and without carryforward losses to future years.
Refer @ Crypto / VDA Income Tax Preparation Guide to Know more
