• Calculation for top bracket and payment of tax

Hi team,

Have gone through multiple articles on this.
Need some clarity on what should be exact percentage when someone is in top bracket to pay income tac.Also, how should a salaried employee pay this LTCG/STCG on other income tax via advance tax payment option.
Asked 7 months ago in Capital Gains Tax

Hello taxpayer,

Going by the limited facts of your query, I have understood that you are having income from salary and trading of crytocurrencies and you are falling within high income tax bracket.

Second, gains from crypto trading can either be classified as business income or capital gains depending on a wide range of parameters which are not clear from above query. Please note that the govt may discard any beneficial position that you try to take without strong reasoning and documentation in this regard. 

Third, any income tax charge arising on a income where either TDS/WHT has been deducted needs to be deposited by way of quarterly advance tax installments during the year to avoid penal interest at the time of return filing.

Fourth, being in HNI category you need to comply with a wide set of additional compliances and pay surcharge along with normal income tax & cess. The exact tax rate will depend on total income that is finally computed and its composition. 

Given the multiple aspects of your query and significant implications of the same, it is advisable to have a telephonic consultation for detailed discussion on end to end tax planning along with possible exemption claims.

 

Best Regards, 

Vikram Aggarwal
CA, Gurgaon
52 Answers
9 Consultations

5.0 on 5.0

- If the gain pertains to current financial year 2021-22, pay advance tax at following dates.

15% of tax liability by 15.06.2021

45% of tax liability by 15.09.2021

75% of tax liability by 15.12.2021

100% of tax liability by 15.03.2022

 

At above due dates, calculate total income tax liability for the financial year 2021-22 apart from salary and pay tax.

 

- If it is related to financial year 2020-21 then it will be paid as self assessment tax and should be paid before 31.07.2021 if net tax liability is more than Rs.1 lacs.

 

Vivek Kumar Arora
CA, Delhi
4279 Answers
428 Consultations

5.0 on 5.0

Hi

You need to calculate total tax liability then need to pay advance tax as follows:- (F.Y. 2021-22)

Advance Tax Due Dates for Individuals Taxpayers 

 

Due Date of Instalment Amount of Advance Tax Payable

On or before 15th June 15% of Advance Tax

On or before 15th September 45% of Advance Tax minus the previous instalment

On or before 15th December 75% of Advance Tax minus the previous instalments

On or before 15th March 100% of Advance Tax minus the previous instalments.

We may assist you in planning

Please have a phone consultation for details discussion.

Karishma Chhajer
CA, Jodhpur
2439 Answers
27 Consultations

5.0 on 5.0

Hi

 

You would be aware about the slab rates upto 30% and 4% cess.

 Apart from this, surcharge is also applicable for total income above 50 lacs. Surcharge rates are as under:

Total income between 50 lacs and 1 cr - 10%

Total income between 1 cr and 2 cr - 15%

Total income between 1 cr and 5 cr - 25%

Total income above 5 cr - 37%

 

If your total income is between 1 cr and 2 cr, effective tax rate for income above 10 (old tax regime) / 15 lacs (new tax regime) would be 35.88%

Lakshita Bhandari
CA, Mumbai
5590 Answers
684 Consultations

5.0 on 5.0

Please note that capital gain tax rate on LTCG of cryptocurrency would be 20% (+surcharge + cess).

Lakshita Bhandari
CA, Mumbai
5590 Answers
684 Consultations

5.0 on 5.0

Dear Sir,

 

Hope you are doing well !!

 

Please find below the tax rate on top bracket:

  • Individual slab rate for income above 10 lakh is 30%
  • An additional 4% Health & education cess will be applicable on the tax amount calculated as above.

  • Surcharge:

    1. 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore.

    2. 15% of income tax, where the total income exceeds Rs.1 crore.

 

Payment of Advance Tax:

  • First Instalment- by 15th June every year you have to pay 15% of tax liability.
  • Second Instalment- by 15th September you have to pay 45% of tax liability.
  • Third Instalment- by 15th December you have to pay 75% of tax liability.
  • The fourth Instalment- by 15th March you have to pay 100% of tax liability.
  •  

Advance tax can be paid online as well as offline. 


To Pay online-

  • Login to the income tax website www.incometaxindia.com
  • Click on e-payment of Taxes tab
  • Now under the Service tab, select e-payment option
  • To pay advance tax, select Challan 280
  • Fill in the required details
  • Choose Netbanking option to pay online
  • After successful payment, a challan certificate will be displayed which will contain the information number, payment
  • details and bank name via which e-payment was made.
  • This certificate is proof of the payment that has been done

 

Payal Chhajed
CA, Mumbai
5136 Answers
194 Consultations

5.0 on 5.0

Hello,

I would like to correct on one small thing here. 

The applicable surcharge is calculated on basic income tax only and cess is calculated on sum total of income tax and surcharge.

Second, yes you can pay entire additional tax liability in one go on the due date coming after date of transfer of capital asset.

However I would advice you to pay it in installments rather than one one shot, on account of opportunity income on tax amount paid early.

 

Best Regards, 

Vikram Aggarwal
CA, Gurgaon
52 Answers
9 Consultations

5.0 on 5.0

- Due to volume and frequency of crytocurrency transactions it should be taxable as business income. It is a virtual asset which is treated as an Intangible Assets under accounting principles and Income tax. Further purpose of trader is not an investment, it is to earn quick gains. Business Income is taxable at slab rates. Yes you can pay entire tax in one go. If excess will be paid then it will refunded after filing of ITR.

Vivek Kumar Arora
CA, Delhi
4279 Answers
428 Consultations

5.0 on 5.0

1. Yes

2. Yes, you can pay in one go now and no need to wait for March.

Lakshita Bhandari
CA, Mumbai
5590 Answers
684 Consultations

5.0 on 5.0

1. Yes.

 

2. Yes, you can pay 100% of additional tax liability in one go without waiting for March 15th.

Payal Chhajed
CA, Mumbai
5136 Answers
194 Consultations

5.0 on 5.0

Hi

 

1. Yes 

2. Yes you can do so.

Karishma Chhajer
CA, Jodhpur
2439 Answers
27 Consultations

5.0 on 5.0

For capital gain tax it depends on which type of capital gain.

Let's take an example of long term capital gain in such case highest surcharge is 37% and considering that and tax rate of 10% of ltcg your total tax would be 14.25%.

 

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Naman Maloo
CA, Jaipur
3915 Answers
52 Consultations

5.0 on 5.0

Thanks for the question.

Exact percentage depends upon applicability of surcharge and cess. Highest tax rate for an individual is 30% plus 4% cess and surcharge if applicable.

If you deal frequently in crypto, it might be considered business income. If thats the case, you can even take advantage of 44AD subject to turnover limits.

You may pay advance tax on LTCG/STCG as soon as it arises. Suppose you estimate your tax liability in June without STCG/LTCG. But in Aug, you book LTCG. Now, you'll have to recalculate your tax liability for the previous year for the purposes of Advance tax, and pay the apprpriate % in Sep.

1. Correct

2. Yes, you can.

Siddharthh Jain
CA, Gurgaon
55 Answers
1 Consultation

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