Capital Gains & Tax: A Complete Guide

Scenarios for Avoid Capital Gains Taxes

In case you have a booked capital gains (longterm or shorterm); we are providing details of the unrealised loss in your portfolio which can be booked by you before 31 March, 2022 to set off the gains and thereby you may not have to pay any capital gains tax.Data for longterm is where the capital gain is greater than Rs. 1 lac (exempt limit for LTCG).
You are also entitled to book capital gains upto a limit of Rs. 1 lac which is exempt. For those clients, we have provided details of unrealized capital gain which can be booked.
In case you have a booked capital loss (longterm or shorterm); we are providing details of the unrealised gain in your portfolio which can be booked by you before 31 March, 2022 to set off the loss.

Listed Equity shares held for less than 1 year attract 15% Short term Capital Gains (STCG). More than 1 year is 10% and will attract Long Term Capital Gains (LTCG).
For LTCG which pertains to equity instruments upto Rs. 1 lac, there is an exemption of capital gains. This is only for equity and equity mutual funds. So if you do not have any LTCG you can book profits in shares & equity mutual funds together upto Rs. 1 lac, and can reinvest the funds again later.
For shares held prior to 31 Jan 2018, you can substitute the cost to be the price as on that date. This can reduce your capital gains tax. Please note however, that “notional” loss cannot be claimed as a deduction. Only “actual” loss is allowed to be set-off. So if your actual cost is say Rs. 50 and 31 Jan 18 price is Rs. 65 and current price is Rs. 30. Your loss is Rs. 20 ie Rs. 50-30 and not Rs. 35 ie 65-30.
Check your carry forward loss position for Short term and long term. Carry forward of loss is allowed upto 8 years.
International funds are STCG if the holding period is for less than 3 years and tax is as per your tax slab. More than 3 years, it is treated as LTCG and the taxation is 20% with indexation. This is applicable to all International ETFs as well.

If you have any liability towards STCG or LTCG, you can review your current portfolio and try to book the loss to set off the gain and therefore not pay any tax. You can always buy-back the shares the next day.

Long Term Capital Loss can be set off against LTCG only. Short term Capital Loss can be set off against STCG and LTCG.