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THE LONG & SHORT OF CAPITAL GAINS!

Understanding long term & short term capital gains is important since the same determines its tax treatment !             The profit or gain arising on the transfer of a capital asset is known as ‘capital gains.’ It is important to ascertain the type of capital gain, as the computation of taxable gains is dependent on the same. Long term capital gains are entitled to concessional tax treatment in comparison to...

REAPING GAINS FROM LOSSES!

Even in the gloom and doom of the capital market, you can make a boom by planning some tax saving strategies!       As a logical corollary to Section 10(38) of the Income-tax Act exempting long term capital gains (LTCG) arising from transfer of securities upon implementation of STT, long term capital losses (LTCL) arising from such security transactions are required to be ignored.  Short term capital losses (STCL)...

HOUSING GAIN EXEMPTION!

Tribunals have held that capital gains from multiple houses and of multiple years can also enjoy complete tax holiday! Section 54 and 54F of the Income-tax Act provide for an exemption in respect of long term capital gains (LTCG), where subject to fulfillment of prescribed conditions, a taxpayer makes investment either in the purchase or construction of a residential house.    RELIEF FOR MULTIPLE HOUSES In the case...

EQUITY VERSUS TAXATION !

Though equity and taxation are often held as strangers, Courts have ensured that they do not always remain so!              Courts have been liberal in their judicial interpretations, while dealing with issues relating to exemption provisions, holding that “a beneficial section has to be construed liberally, having due regard to the object which it intends to serve.”             In a recent matter that came up...

PARK YOUR GAINS IN A HOUSE!

Courts have liberally interpreted exemption provisions via investment of capital gains in a residential house!  Under Section 54 of the Income-tax Act, an exemption is available to a taxpayer who is an individual or a Hindu Undivided Family, in respect of the transfer of a residential house (whether self-occupied or let out) held for more than 36 months, where the capital gains arising from the transfer are...

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