Mumbai. During the Corona period, new investors have increased in the market and mutual funds. Most new investors are not aware of the tax on the earnings from the stock market. Profits from investing in the stock market and mutual funds are also taxed.
However, depending on the nature of profit (long term, short term etc.), the tax and its rate change. Let us know in which situation you have to pay so much tax and under which circumstances tax can be saved. Share Market
Short Term Capital Gains
If you make a profit by selling shares within 12 months, then that profit will be called Short Term Capital Gain. On this, 15 percent short-term capital gains tax will have to be paid. If you sell shares at a loss, then you can carry forward that loss within the next 8 years
Long term capital gains
If you make a profit by selling a stock after holding it for 12 months, then it will be called long term capital gain. On this, you will have to pay 10 per cent of that, even if the total profit is more than one lakh rupees. If the loss is there then it will be able to carry forward for 8 years. But keep in mind that the loss will be set-off only from the long-term capital gains.
Dre Trading
If you are not taking delivery and just took today and are working to sell today, then this is your speculative business income. Within your normal tax slab, it will be added as a speculative business income. If you have suffered a loss, then it can be carry forward, but only for four years. Loss of speculative income can be set off only from speculative income.
mutual fund
Equity fund
Before a year, profits from selling units of equity mutual funds (such funds which have 60 per cent equity) attract 15 per cent short-term capital gains tax and 4 per cent cess. At the same time, if the investment period is more than one year, then 10% long term capital gains tax and 4% cess is made on the profits. There is no tax on long-term capital gains of less than one lakh rupees.
DDT – Dividends given by equity mutual funds are tax-free in the hands of the investor, but AAMI pays the Dividend Distribution Tax (DDT) at the rate of 11.648.
Debt fund
The minimum holdings period for short-term capital gains in debt funds is 3 years. Within three years of investment, the profits from selling the units are added to the income of the investment. Income tax is levied as per the tax slab of the investor. At the same time, there is a 20 percent tax with indexation on the profits from selling the unit after three years of investment. Here too you can carry forward the loss for 8 years. You can adjust it with any income.
DDT
In debt funds, fund houses pay dividend distribution tax at the rate of 29.120 per cent before distributing the dividend to the investors.
