Hi, I am planning to start investing in company shares for long term investment. My question is, 1) Do I need to file ITR if I own company shares but any sale has not taken place ? 2) What If I sell them at profit and buy another company shares of same value in current year ? 3) If I buy and sell them in current year only with profit ? 4) And what if I keep them for long term upto 5 years and sell them at profit ? In which of the above cases I will need to file ITR ? If yes, do I also need to show my non-taxable agricultural income also in ITR which is around RS 5 lakh per annum ? I alaredy have agricultural income around 5 lac p.a on which tax is not needed to be paid. Thanks for giving me your precious time. :)
Hi
1 for holding shares ITR not required
2 and 3
in this situation this is called short term capital gain and you have to pay taxes @15% (assuming all transactions done by paying stt )
4 if you keep shares more than 1 year then it's tax free capital gain u/s 10(38) of income tax act 1961
5 yes you have to report exempt income(agricultural income in it case ) in ITR
Regards
CA Lalit Vandal
From Sirsa
1) There is no need to declare purchase of shares but if your taxable income exceeds Rs 25 Lakhs, you need to disclose your assets and liabilities.
2) The long term capital gains (LTCG) on equity shares purchased and sold through stock exchange are exempt from tax. If the shares are held for more than 1 year, the profit/loss on sale of such shares will be LTCG. The purchase of shares of another company or even same company has no impact.
3) If you are selling the shares within 1 year, the profit/loss will be short term capital gains/losses.
4) As you are selling the shares after 1 year it will be LTCG only and exempt from tax, if you have transacted through stock exchange.
You need to file IT Return if your gross total income is more than the basic exemption limit of Rs. 2.5 Lakhs. You need to show income from all the sources. The agricultural income will also have to be shown as exempt income.
Is LTCG needed to be declared ?
Yes
All income either taxable or not required to disclose in itr
What about dividends ? For example if I get dividends upto Rupees 20,000 per year, will I need to declare those ?
LTCG needs to be declared.
Dividends are exempt but they need to be shown as exempt income
Yes, you need to file the return for all the above cases except first. Yes you have to disclose LTCG and agricultural income
1. Sir if you dont have any income which is taxable and also if you have not earned any income from sale of shares then there is no need to file Tax Returns.
2. If there is a profit which is taxable then you need to file tax Returns declaring the sale. It will not affect whether you invest in another shares.
3. If you buy and sell and earn profit or loss then also you need to file the tax Returns.
4. If you keep then for 5 years it will be treated as LTCG and is exempt. After 5 years what will be the Income tax amendment regarding LTCG will not be known but as of now it is exempted. If you sell at profit or loss you need to declare and file IT Returns.
At the time of filing returns for Sale of shares you should also declare Agricultural Income
Dividends are exempted. If you have not sold any shares then there is no need to file only for dividend which is exempted
Hi,
You have to file IT Returns.
All the Exempt Incomes (Long-term Capital Gains on STT paid shares, Dividend from Domestic Companies) should be shown in Schedule EI as Exempt Income.
The taxable Income/Loss (Short-term Capital Gains or Loss) should be shown under the head Capital Gains in Schedule CG. If there is Profit, you will have to pay taxes as applicable. In case of loss, the same can be carried forward and set off up to 8 Assessment Years against any future Taxable Capital Gains (Both Short and Long Term)
Dear Sir,
Please find responses below:
1. No
2. The moment you sale the shares, you need to file ITR assuming your gross total income xceed minimum amount chargeable to tax.
3.yes, you need to file income tax return.
4. Yes, you need to file
Sir, it is strongly recommended to file ITR if you have agricultural income of 5 lacs. It's easier to justify the source.
Please feel free to call/revert in case of any doubts
Thanks and Regards
Abhishek Dugar
CA CS B.Com
Hi,
1) There is no need to file the return unless you have generated any taxable income.
2) if you have invested in share for capital gain purpose and hold it for period of more than 1 year then it is known as LTCG. And LTCG on shares in not taxable though you need to show it under exempt income.
If shares are sold within year of its purchase then any profit arising from sale of shares is known as short term capital gain and is taxable in the hands of the assesse.
Dividends are also tax free. You are required to show dividend income under exempt income.
Hello Sir,
It is advisable to file Income Tax Returns for each and every year to avoid compliance notices from the Income Tax Department.
Regards
Keerthiga Padmanabhan
M.Com., CA, LLB
Hello,
Yes, LTCG has to be declared under the tab Exempt Income.
Yes, Dividend is also to be declared under the tab of Exempt Income.
Regards
Keerthiga Padmanabhan
M.Com., CA, LLB
Hello Sir,
It is not mandatory but I will very much recommend you to file Income Tax Returns in order to avoid Compliance notices from the department.
Agricultural income also needs to be shown although no tax is to be paid on it.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Hello,
Yes LTCG and Dividend both are to be declared under the head Exempt Income.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP