Long Term Capital Gain Tax
Long Term Capital Gain Tax
Long Term Capital Gain Tax computed under five head of income.
The total income of any person is to be computed in the manner prescribed in the Income-tax Act 1961. set-off of loss as per the provisions of sections 70 to 80 is a stage which is part of this procedure. When this procedure is adopted for computing gross total income or total income, only the amount of income after set-off remains under a head as part of gross total income or total income . only that amount of long-term capital gains which is included in the total income would be subject to tax at a prescribed flat rate. Thus, if there was a loss of 10,000 from business and there is long-term capital gains of 30,000, then after setting off of loss of 10000 with long term capital gains only 20000 would remain under the head “capital gains” to be include in the gross total income or total income. the flat rate of tax will be applicable in respect of 20000 and not 30000 since the amount of long- term capital gains included in that total income is 20,000 (here it is assumed that the total income ignoring long term capital gains is above exemption limit.)
Thus, if there was a loss of 10,000 from business and there is long-term capital gains of 30,000, then after setting off of loss of 10000 with long term capital gains only 20000 would remain under the head “capital gains” to be include in the gross total income or total income. the flat rate of tax will be applicable in respect of 20000 and not 30000 since the amount of long- term capital gains included in that total income is 20,000 (here it is assumed that the total income ignoring long term capital gains is above exemption limit.)