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TAX PLANNING  ~ Equity Gains and Losses

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TAX PLANNING  ~ Equity Gains and Losses

TAX PLANNING  ~ Equity Gains and Losses

   Simple Pointers

Financial Year 2021-22 will close out under a fortnight from now on March 31,2022 .Tax Planning can help in reducing Tax Liability on Equity Gains  by taking advantage of the exemptions and set-offs available under Income Tax .Remember to file Income Tax Returns on Time to be able to carry forward any Equity loss .Remember too that one is not allowed to set off any loss under the head ‘Capital Gains’ against income from any other heads .Such Loss can only be set-off within ‘Capital Gains’ head

Here are a few simple pointers in tabular format

  Long-Term Short-Term Speculative
Definition > One Year Holding < One Year Holding Derivatives, Intra-day Trading
Tax Rate % 10 15 Normal Slab
Exemption Gains up to Rs One Lakh None None
Set offs Long-Term Loss is allowed to be set-off only against Long Term Gains Short Term Loss can be set-off against both Long-Term and Short-Term Gains Loss can be netted from  gains in only similar Trading Operations
Loss Carry Forward allowed Up to Eight Years succeeding the Year in which Loss Incurred Up to Eight Years succeeding the Year in which Loss Incurred  


Some Action that can be considered to take advantage of Income Tax Allowances :

  • Book Long-Term Gains of Rs One Lakh which is the Exemption Limit and reinvest
  • If Long-Term Gains exceed Rs One Lakh, look for booking any Long-Term Loss to use as set-off. One can similarly book some short-term losses too to use to set-off long-term and short-term gains to reduce tax liability in the year. .One can buy-back the holdings the next day
  • One can book gains to be set off against carry forward loss anytime within the eight years such loss is allowed to be carried forward

Do consult your Tax Advisor for more and before taking any above action

Gaurav Parikh, Managing Director, [email protected] +91-9820162597


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