Provide complete transaction records to ensure accurate gain/loss reporting and tax compliance.
Capital gains taxation requires precise tracking of cost of acquisition, holding periods, and applicable indexation benefits. A single misclassification can lead to audit notices and significant penalties. EZTax ensures every transaction is properly documented and reported to withstand tax department scrutiny.
What is indexation benefit and how is it calculated?
Indexation benefit adjusts your cost of acquisition for inflation using the Cost Inflation Index (CII) published by the income tax department. It applies only to long-term capital assets held for more than 2 years, significantly reducing your tax liability.
What is the difference between short-term and long-term capital gains?
Short-term gains (assets held ≤2 years) are taxed at your slab rate. Long-term gains (assets held >2 years) are taxed at flat 20% (with indexation benefit) or 10% (without indexation). Our experts ensure proper classification for minimum tax.
Can I claim section 54 exemption on property sale?
Yes, if you reinvest the sale proceeds in a residential property within specified timeframes. Section 54 exempts long-term gains up to the reinvestment amount. We handle the complete calculation and compliance.
How do I handle losses from investments?
Capital losses can offset capital gains. Unabsorbed losses can be carried forward for 8 years to set off against future gains. We identify and strategically apply losses to minimize your tax liability.
What if I don't have complete cost of acquisition records?
Fair Market Value (FMV) can be used where records are unavailable, but you must report it in your ITR. We guide you on filing with FMV and the documentation required to support such claims.