Income Tax Rules: Many people are confused by the fact that this time while filing ITR, they will not have to pay tax on income up to Rs 12 lakh. Let us tell you that this is not the case at all. Under the new income tax system, tax free income up to Rs 12 lakh is applicable from the financial year 2025-26.
Income Tax Rules: In the budget, the government has made the income of people with taxable income up to Rs 12 lakh completely tax free with tax rebate under the new income tax system. It sounds very good, but not everyone will get this benefit. It may be that your total taxable income is less than Rs 12 lakh, yet you will have to pay tax. Let us know what is the condition behind this.
Many people are confused by the fact that this time while filing ITR, they will not have to pay tax on income up to Rs 12 lakh. Let us tell you that this is not the case at all. Under the new income tax system, tax exemption of income up to Rs 12 lakh is applicable from the financial year 2025-26, while the ITRs that will be filed now are for the financial year 2024-25.
Now know who will not get the benefit
If you invest money in the stock market or buy and sell property and earn some money from it, then you will not get the benefit of tax free income up to Rs 12 lakh on that income. In such a situation, the income from capital gain will not be counted in the calculation of taxable income.
Let us understand with an example
Let us assume that your total income in a year is Rs 12 lakh. In this, Rs 8 lakh is your income from salary, but the remaining Rs 4 lakh you have earned from capital gain. In such a situation, you will get tax benefit on Rs 8 lakh, but you will have to pay capital gain tax on Rs 4 lakh. So in this condition, your income of Rs 12 lakh will not be tax free.
What is capital gain?
A salaried person can earn capital gain income in two ways. First is from the stock market and second is from buying and selling a house or land. If you sell a share in the stock market after keeping it with you for more than 1 year, then the income earned from it is called long term capital gain. On the other hand, if you sell it before 1 year, then it is called short term capital gain.
What is the rule in case of property?
If seen in case of house or land, then the definition of short and long term is slightly different. If you sell the house or land after 2 years, then the profit you will get will be called long term capital gain. On the other hand, the profit you get in case of selling before 2 years will be called short term capital gain.
How much capital gain tax is levied?
If we talk in the context of stock market, then you will have to pay 20 percent tax on short term capital gain. Earlier this tax was 15 percent. On the other hand, you will have to pay 12.5 percent tax on long term capital gain, which was 10 percent earlier. However, if you have long term capital gain, then you will get tax exemption on gain up to Rs 1.25 lakh.
How will tax be levied on income from house or land
If you have long term capital gain by selling house or land, then its calculation will be slightly different. 12.5 percent tax will have to be paid on the house purchased before July 23, 2024 without including the effect of inflation (indexation). At the same time, if you will also have the option of paying 20 percent tax with indexation benefit under the old scheme. Out of the two options, whichever tax is less, you can pay it.
LTCG holders will get special benefit from this year
Have you also got long term capital gain up to Rs 1.25 lakh in the financial year 2024-25? If yes, then the Income Tax Department has given a special facility for you. Due to this, it will now be easier for you to file ITR. Recently, ITR-1 form has been issued by the Income Tax Department, in which special measures have been taken regarding long term capital gains up to Rs 1.25 lakh.
Big change in ITR form
This year a big change has been made in the ITR form. This change can be filed in ITR-1 (Sahaj) to deposit long term capital gain (LTCG) under section 112A. However, its condition is that LTCG should not exceed Rs 1.25 lakh and the taxpayer should not have any loss to carry forward or set off under the capital gain category.
This facility has started this year
If you are in this category, then it has become easier for you to file income tax return this time. Let us tell you that earlier there was no provision for reporting capital gain tax in ITR-1 form. This special facility has been started from this year.
Those with short term capital gains will not get the benefit
ITR-1 form cannot be used by those taxpayers who have short term capital gains from selling house property or from listed equity and equity mutual funds.
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