Capital Gains

Income Tax Act provides many scheme of saving tax on long term capital gains. These , exemption provisions are contained in section 54,54B,54D , 54F etc. The conditions for claiming exemption requires that the gains have to be spend in a specified manner. For example , in case of claim of exemption u/s 54 of tax from LTCG on sale of residential house , one has to purchase the house within two yea

This edited article has been provided to Finance ViewPoint by Raj Kuckreja CA, of Kuckreja Accounting and Taxation Services Pty Ltd (Phone: 02-9708-6978). The information in this article is general in nature and DOES not represent individual financial or taxation advice. Liability limited by a scheme approved under the Professional Standards LegislationCapital gains are the profits that an investo

I am a SENIOR CITIZEN. I sold my property which is a LAND and had a Long Term Capital Gain. I could not utilized the Capital Gain Amount BUT before submitting my Income Tax Return deposited the Capital Gain Amount of 19 lakhs with the SBI under the Capital Gain Account Scheme (Fixed Deposit) for 3 years. Unfortunately due to my ill health condition I could not invest the Capital Gain Amount in any

Investors who own properties that have appreciated significantly and investors who have written off a portion of an investment that has depreciated, both face a similar problem when considering making a sale: capital gains taxes.  Those with properties that has increased in value may face large capital gains taxes on the property's increased value, and others will be faced with a de

Investors who own properties that have appreciated significantly and investors who have written off a portion of an investment that has depreciated, both face a similar problem when considering making a sale: capital gains taxes.  Those with properties that has increased in value may face large capital gains taxes on the property's increased value, and others will be faced with a de

Capital gainsIncomes such as salary, rent and business income are regular and recurring incomes. These are earned in return for providing a particular service such as skills in case of the salaried, professional service or service in the form of permission to use property. However, these do not cover all sources of income. Incomes can arise out of the sale of capital assets such as your house, jew

Suttabhai will be back to blogging full time from Monday 9th June. While May 2008 has proved to be the most disastrous month for the KSE-100 index in recent times, with the market getting gang-banged from 15,122 to 12,130, the news that CGT has been deferred for 2 years along with no change in CVT should [...]

I've come across these questions several times in the last few days, so I thought I'd answer them to dispel some intuitions novice investors have.1. If I reinvest my dividends, do I have to pay taxes on them?Whether you reinvest your dividends or not, this decision will never (unless tax laws are changed) affect your taxes. Whether your dividends are taxed depends on what dividends you're talking

- Scott Miller “Can we raise capital gains taxes… YES WE CAN”. What kind of presidential candidate responds to a question about raising capital gain taxes by saying “That’s not fair!”? That was just part of Barack (I’m a Lover Not a Fighter) Obama’s childish response to a debate question on the issue. The rest of his [...]

A capital gain is income derived from the sale of an investment. A capital investment can be a home, a farm, a ranch, a family business, or a work of art, for instance. In most years slightly less than half of taxable capital gains are realized on the sale of corporate stock. The capital gain is the difference between the money received from selling the asset and the price paid for it. "Capital gains" tax is really a misnomer. It would be more appropriate to call it the "capital formation" tax. It is a tax penalty imposed on productivity, investment, and capital accumulation. The capital gains tax is different from almost all other forms of taxation in that it is a voluntary tax. Since the tax is paid only when an asset is sold, taxpayers can legally avoid payment by

I have recently sold my Commercial property for 31.5 lakhs which was purchased in 1999-2000 for 5 lakhs.According to my CA our capital gains comes around 15 lakhs & we have to pay 20% as a Long term capital gain tax.I want to have clarity on following points.1:-Should I invest 15 lakhs in other property to save tax or I have to invest whole sales proceedings of 31.5 lakhs.2:-What is the amount I have to invest in Capital gain Accounts( Nationalised banks) 15lakhs or 31lakhs if I need time to finalise on the property.3:-In Income tax rules for Commercial & residential properties are same or they are treated differently? Vijay Jaywant Naik , MumbaiGood question.!Yes , income tax law provides better treatment for long term gains on residential property than the commercial property.Whi

When you sell an investment for more than you paid for it, the difference between the selling price and purchase price is called a capital gain. Conversely a loss is called a capital loss. In Canada, capital gains offer a tax advantage because only 1/2 of the net capital gains are included in taxable income.Note that I have said "net" capital gains. Capital gains generated in the year must be offset by any capital losses incurred in the year. Capital losses can only be used to reduce net capital gains to zero and cannot be used against other income. All is not lost however! Any unused capital losses can be carried back three years or forward indefinitely.If you own your own small incorporated business or qualified farm property, the government in 2007 increased the lifetime capital gains e

When you sell an investment for more than you paid for it, the difference between the selling price and purchase price is called a capital gain. Conversely a loss is called a capital loss. In Canada, capital gains offer a tax advantage because only 1/2 of the net capital gains are included in taxable income.Note that I have said "net" capital gains. Capital gains generated in the year must be offset by any capital losses incurred in the year. Capital losses can only be used to reduce net capital gains to zero and cannot be used against other income. All is not lost however! Any unused capital losses can be carried back three years or forward indefinitely.If you own your own small incorporated business or qualified farm property, the government in 2007 increased the lifetime capital gains e

SOME VERY USEFUL INFORMATIONIn this edition of the Real Estate Revolution, we will share some useful information that is to short to warrant a single newsletter.CAPITAL GAINS RATES REVISITEDExactly what Capital Gains rate applies to the sale of your property depends on several things, including when you bought the property, when you sold it, your overall income level and sometimes what tax-code changes are made in the meantime.Currently, capital gains may be taxed at 5 percent, 15 percent and 25 percent or a combination of rates (These lower rates are scheduled to end on Dec. 31, 2010). These tax levels are known as long-term capital gains and apply to property that you hold for not less than 366 days (more than one year). The long-term capital gain tax is, generally, much lower than what you pay on your regular income.In fact, it is a taxpayer's income level that generally determines which capital gains rate is owed. If your profit pushes you into a higher bracket, you could possibly

I received another Moveon.org email this week. As usual, the email contained lies, damned lies, and no statistics to back up its assertions. It focused on the Alternative Minimum Tax and the Capital Gains Tax. Because the Alternative Minimum Tax, a tax created by liberal Democrats, is now harming the middleclass, the Democrats want to repeal it. Go figure! But, of course the Democrats cannot... Click the Headline Link to Visit Copious Dissent and Read the Full Story.

If you have been invested in the market recently then you have experience the major shock waves of highs and lows. Everyone is looking for the next big growth story, but what about a nice Capital... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

If you are thinking about selling your house but are concerned about the capital gains tax you may have to pay on profit made from sale then there is some good news for you. You might not have to pay any tax on the profit made if certain conditions are fulfilled. In the following sections we will look at how you can retain the total amount of profit made from sale of your house without having to pay any taxes. When a person sells his house and makes a profit then this profit can be exempt from taxes up to the maximum exemption limit of $250,000 if: He meets the use of house requirement and The ownership requirement, and also Had not used capital gains tax exemption in the last two years before the house is sold. The exemption limit is $500,000 if: The seller is married & files a joint return and Both he and his spouse meet the use of house requirements and Either he or his spouse meets the ownership requirement, and lastly Neither

One of my relatives has returned to India about 6 years back after residing in USA for about 15 years. His Indian Income comprises of Interest on Bank Deposits and on which he is paying Indian... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

HERE IS A LOOK AT THE TAXES YOU WOULD BE OBLIGED TO PAY IF YOU WERE SELLING PROPERTY IN YOUR PERSONAL NAMEBy selling real estate titled in your name or the name of a “pass-through” entity (LLC or “S”-Corp) you could pay as much as 60% of the income you receive from the sale in taxes. Those taxes include but are not limited to capital gains taxes, self-employment taxes, Alternative Minimum Tax as well as state and federal income taxes. Adding insult to injury, when you sell real estate titled in your own name or the name of a “pass-through” entity, many of your “real estate business expenses” will not be deductible when you file your 1040 tax return.INCOME TAXES REPORTED ON YOUR 1040 TAX FORMThe tax effect of selling property as an individual or the name of a “pass-through” entity is that profits made from the sale of real estate are added to the income you report on your 1040 tax return. On the other hand, any losses from the operation of the property are deducte

What is Capital Gain: The difference between the sale consideration (selling price) and the cost of acquisition (purchase price) of the asset is called capital gain. If the investor sells his units and earns capital gains, he is liable to pay capital gains tax. Capital gains are of two types: Short Term Capital GainLong Term Capital Gain Short Term Capital Gains: The holding period of the Stocks or Mutual Fund units for less than or equal to 12 months from the date of allotment of units then short term capital gains is applicable. On Short Term capital gains no Indexation benefit is applicable. Tax and TDS Rate (excluding surcharge) Resident Indians:The Gain will be added to the total income of the Investor and taxed at the marginal rate of tax. No TDS. NRIs: 30 per cent TDS from the gain. Long Term Capital Gains: The holding period of the Stocks and Mutual Fund units is more than 12 months from the date of allotment of units. On Long Term capital gains Indexation benefit

Can ST Loss arising from transactions, which do not include Security Transaction Tax be adjusted against Long Term gains, which attract 20% tax rate, assuming there are some Short term gains as... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

I have short term capital gains from share trading of Rs 2,20,000. I have no other income in that financial year. I have lici of Rs 35,000 and medical insurance premium of Rs10,000 and children education fees of Rs 10,000. Can I claim rebate of Rs. 55,000 from short term capital gains tax, pay tax on remaining Rs. 1,65,000. Please let me know. bindusinghania@yahoo.co.inThe tax on short term capital gains on shares was reduced from normal rate to 10 % from assessment year 2005-06 .But the cost of this benefit was that neither deduction u/s 80C to 80U nor Rebate u/s 88 was allowed . Sub section 2 and 3 of the Section 111 contains such restriction .The excerpts are given as under: "111A. (1) ...... (2) Where the gross total income of an assessee includes any short term capital gains referred to in sub-section (1), the deduction under Chapter VI-A shall be allowed from the gross total income as reduced by such capital gains. (3) Where the total income of an assessee includes any short

I have questions about Capital Gains tax...1) I have suffered some losses in Futures and Options , can I submit that losses with my IT return (I am a salaried class person with Permanent job) ,can I set off my salary with these losses. I have already paid the taxes through TDS. Do I need to club the loss with salary..2) I have some gains in Stocks,which are taxed at 10%, should I show them into IT return3) Mutual funds are reinvested and then how do I calculate the Taxes in case of Reinvestment of dividend... ak_131@yahoo.com Salary can not be adjusted with losses on futures and options. The future and options are now classified as business activity , therefore the gains or losses in derivative trading is business loss or gain. In your case , you have incurred business loss. I presume you have got short term capital gains taxed @10%.Loss incurred on future and option can be set off with capital gains. So , if that be the case, adjust the business loss on future and option

People often struggle with decisions regarding their assets that have large capital gains built up in them. The driving factor here is the tax consequence of a sale, but that should not be the only consideration.First ask yourself, what are your long term expectations for the price of the asset in question? If you expect that asset to continue to grow (at least as much as the broad market does), then you should feel no immediate desire to sell. If, on the other hand, you expect the asset's price to fall, remain flat, or grow sluggishly, then you have a decision to make. My basic rule of thumb is that you should not own an asset if you expect it to perform badly in the future. Your money could be better invested in other areas. So, while there may be capital gain tax consequences, you should probably sell the asset if you do not expect it to perform well. That said, do try to hold out for the long term capital gain tax treatment (one year for stocks) if you can.There are other f

Steve asks: I am planning to sell shares of stock that I own which are currently subject to Long-Term Capital Gain treatment, as I have held them for over a year. I'm not clear on the following things: 1) How do I qualify for LTCG of 5%, i.e., is there an income limit? 2) Is there an even lower rate (0%??) if I hold on to the stock longer, and if so, how much longer? 3) Is there an income

As expected,after hearing the news last night re: the exemption of capital gains tax to be deferred till July 2008, the Karachi Stock market opened with a full erection this morning. This is the best news this market has received in some time and there is talk of lowering the CVT by half. While there were many gains across the board , only NBP, OGDC, MCB and Askari Bank really went up. OGDC finally moved after being stagnant for nearly a month  and the KSE-100 index has finally closed above its 30 DMA after nearly 3 weeks. The market should test 10,500 soon. News : The government will hold a public offering for Oil and Gas Development Co Ltd (OGDCL), the country’s largest listed firm, at a price of 110 rupees per share this week, the government said on Tuesday.Up to 21.505 million shares will be offered in lots of 500 in what would be the second public offering for the state-run company, the Privatisation Commission said in a statement."The subscription for the retail

News has just come in that the Prime Minister has extended the capital gains tax exemption for the Karachi Stock market for another year until July 2008. It was meant to be implemented this July after the budget this year. It should give this weary market a welcome boost, removing one of the 2 expected hurdles for 2007 (the other being uncertainity at election time at the end of the year).

Lisa from Amarillo, Texas asks: Can capital gains realized on real estate sale be invested in stocks within the 45 day time frame or must the replacement be real estate? My reply: The net proceeds that you receive (which may be all or part of your taxable capital gain) from the sale of real estate can be invested in anything, with no time limit. However, if you are really asking how to defer

pkumar_chn@dataone.in Asked: A person sold his free hold land to a builder developer so that he creates flats to be sold. As usual no registration or conveyancing takes place now say in Jan 07. Only Power of attorney is given. Consideration for the same is partly payable in cash and partly in kind by way of allotments of constructed flat. Cash component is payable in 5 equal installment. Only one such installment is received before March 07 and that will be utilised in full for payment of bank dues so as to clear the document from bank. Under these circumstances, how capital gain tax is attracted and at what point of time. i.e. in Jan 07 itself or say by Mar 09 only when final installment as well as constructed portion is expected to be received. If liability to LTCG arises in Jan 07 itself how can the assessee do any tax planning without any single rupee available out of this transaction before Mar 07?Your question is whether there will be capital gains without any regsitration of do

let us take example. Mr. X, a Non Resident had acquired a property in India. He left India and settled in USA. After twenty years, he sold the property in India for a huge sum. He wants to save on LTCG tax by purchasing a residential house , so that exemption from LTCG u/s 54 can be claimed. So, he purchases a house in USA Now question arises whether purchase of a house outside India makes him eligible to claim exemption u/s 54 of the I T Act? In my opinion, Yes . The purchase of property outside India also makes a Non Resident eligible for exemption u/s 54 of the I T Act .The reasons are as follows: Section 54 is applicable to both Resident and Non Resident equally.The house property should be purchased. There is no restriction that the purchased house should be India only. The Mumbai Tribunal judgment in case of Mrs. Prema P Shah vs ITO 282ITR (AT)211 [2006] is significant in this regard. In fact , this order of Tribunal not openly confirmed that the exemp

pkumar_chn@dataone.in Asked: A person sold his free hold land to a builder developer so that he creates flats to be sold. As usual no registration or conveyancing takes place now say in Jan 07. Only Power of attorney is given. Consideration for the same is partly payable in cash and partly in kind by way of allotments of constructed flat. Cash component is payable in 5 equal installment. Only one such installment is received before March 07 and that will be utilised in full for payment of bank dues so as to clear the document from bank. Under these circumstances, how capital gain tax is attracted and at what point of time. i.e. in Jan 07 itself or say by Mar 09 only when final installment as well as constructed portion is expected to be received. If liability to LTCG arises in Jan 07 itself how can the assessee do any tax planning without any single rupee available out of this transaction before Mar 07?Your question is whether there will be capital gains without any regsitration of do

let us take example. Mr. X, a Non Resident had acquired a property in India. He left India and settled in USA. After twenty years, he sold the property in India for a huge sum. He wants to save on LTCG tax by purchasing a residential house , so that exemption from LTCG u/s 54 can be claimed. So, he purchases a house in USA Now question arises whether purchase of a house outside India makes him eligible to claim exemption u/s 54 of the I T Act? In my opinion, Yes . The purchase of property outside India also makes a Non Resident eligible for exemption u/s 54 of the I T Act .The reasons are as follows: Section 54 is applicable to both Resident and Non Resident equally.The house property should be purchased. There is no restriction that the purchased house should be India only. The Mumbai Tribunal judgment in case of Mrs. Prema P Shah vs ITO 282ITR (AT)211 [2006] is significant in this regard. In fact , this order of Tribunal not openly confirmed that the exemp

Can a residential property be purchased by 3 members of the family in equal ratio, if yes, will any liability arise for Income Tax & Wealth Tax purpose if they own residential property in their individual names and they sell off their residential property within a year of purchase? i.e. all Individuals own residential property in their own name and now they want to own, one combine big residential property in equal ratio and they would sell off their residential property within a year. desaiashit2000@...................in Yes they can ,They can avail the exemption u/s 54 if all of them have joint and fixed ownership of the property. Section 54 which gives exemption shall be applicable according to their expenditure in the new house property . Read the Section 54 carefully and take full benefit out of it "54. (1) Subject to the provisions of sub-section (2), where, in the case of an assessee being an individual or a Hindu undivided family], the capital gain arises from the transfer of