{"id":32013,"date":"2021-08-13T10:34:51","date_gmt":"2021-08-13T05:04:51","guid":{"rendered":"https:\/\/www.squareyards.com\/blog\/?p=32013"},"modified":"2022-06-22T18:02:17","modified_gmt":"2022-06-22T12:32:17","slug":"capital-gains-tax-ptax","status":"publish","type":"post","link":"https:\/\/www.squareyards.com\/blog\/capital-gains-tax-ptax","title":{"rendered":"Understanding Capital Gains Tax"},"content":{"rendered":"\r\n<h2 class=\"wp-block-heading\">What are Capital Gains Taxes<span style=\"font-weight: 400;\">?\u00a0<\/span><\/h2>\r\n\r\n\r\n\r\n<p><strong>The basic requirements for Capital Gains are:<\/strong><\/p>\r\n\r\n\r\n\r\n<ul>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Existence of a Capital Asset<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Transfer or Sale of such Capital Asset<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Profit earned from such transfer.<\/span><\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<p class=\"has-text-align-justify\" style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Sometimes, when the capital asset depreciates and is sold at a value lower than the original purchase price, we say a capital loss is incurred.<\/span><\/p>\r\n\r\n\r\n\r\n<div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\">\r\n<h2>Table of contents<\/h2>\r\n<ul>\r\n<li><a href=\"#h-what-are-capital-assets\" data-level=\"2\">What are Capital Assets?<\/a><\/li>\r\n<li><a href=\"#h-types-of-capital-gains\" data-level=\"2\">Types of Capital Gains<\/a><\/li>\r\n<li><a href=\"#h-what-are-short-term-capital-gains\" data-level=\"2\">What are Short-Term Capital Gains?<\/a><\/li>\r\n<li><a href=\"#h-what-is-ltcg\" data-level=\"2\">What is LTCG?<\/a><\/li>\r\n<li><a href=\"#h-what-is-capital-gains-tax-in-india\" data-level=\"2\">What is Capital Gains Tax in India?\u00a0<\/a>\r\n<ul>\r\n<li><a href=\"#h-short-term-capital-gains-tax-india\" data-level=\"3\">Short Term Capital Gains Tax India<\/a><\/li>\r\n<li><a href=\"#h-long-term-capital-gains-tax-india\" data-level=\"3\">Long Term Capital Gains Tax India<\/a><\/li>\r\n<\/ul>\r\n<\/li>\r\n<li><a href=\"#h-capital-gains-tax-calculator\" data-level=\"2\">Capital Gains Tax Calculator<\/a><\/li>\r\n<li><a href=\"#h-income-tax-indexation\" data-level=\"2\">Income Tax Indexation<\/a><\/li>\r\n<li><a href=\"#h-short-term-capital-gains-tax-calculator\" data-level=\"2\">Short-Term Capital Gains Tax Calculator<\/a><\/li>\r\n<li><a href=\"#h-long-term-capital-gains-tax-calculator\" data-level=\"2\">Long Term Capital Gains Tax Calculator<\/a><\/li>\r\n<li><a href=\"#h-capital-gains-tax-rates\" data-level=\"2\">Capital Gains Tax Rates<\/a>\r\n<ul>\r\n<li><a href=\"#h-short-term-capital-gains-tax\" data-level=\"3\">Short Term Capital Gains Tax<\/a><\/li>\r\n<li><a href=\"#h-long-term-capital-gains-tax-rate\" data-level=\"3\">Long-Term Capital Gains Tax Rate<\/a><\/li>\r\n<\/ul>\r\n<\/li>\r\n<li><a href=\"#h-capital-gains-tax-exemption\" data-level=\"2\">Capital Gains Tax Exemption<\/a><\/li>\r\n<li><a href=\"#h-saving-tax-on-agricultural-land\" data-level=\"2\">Saving Tax on Agricultural Land<\/a><\/li>\r\n<li><a href=\"#h-capital-gain-highlights-2021\" data-level=\"2\">Capital Gain Highlights 2021<\/a><\/li>\r\n<li><a href=\"#h-you-might-also-like\" data-level=\"2\">You Might Also Like<\/a><\/li>\r\n<li><a href=\"#h-frequently-asked-questions-faq-s\" data-level=\"2\">Frequently Asked Questions (FAQ&#8217;s)<\/a><\/li>\r\n<\/ul>\r\n<\/div>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-what-are-capital-assets\"><strong>What are Capital Assets?<\/strong><\/h2>\r\n\r\n\r\n\r\n<p class=\"has-text-align-justify\" style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Capital Asset can be defined as a property of any kind held by a person who may or may not is connected with his business or profession.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<p class=\"has-text-align-justify\" style=\"text-align: justify;\"><span style=\"font-weight: 400;\">So, buildings, land, houses, vehicles, jewellery, patents, trademarks, leasehold rights, machinery and investments in mutual funds are some of the examples of capital assets. This also includes rights in or concerning an Indian company. The following are excluded from the category of capital assets:<\/span><\/p>\r\n\r\n\r\n\r\n<ul>\r\n<li><span style=\"font-weight: 400;\">Any stock, consumables or raw materials held for business purposes or profession<\/span><\/li>\r\n<li><span style=\"font-weight: 400;\">Personal goods\u00a0<\/span><\/li>\r\n<li><span style=\"font-weight: 400;\">Agricultural land in a rural area<\/span><\/li>\r\n<li><span style=\"font-weight: 400;\">Special bearer bonds (1991)<\/span><\/li>\r\n<li><span style=\"font-weight: 400;\">6 \u00bd% of gold bonds (1977) or 7% gold bonds (1980) or national defence gold bonds (of 1980) issued by the Central Government<\/span><\/li>\r\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Deposit certificates issued under the Gold Monetization Scheme, 2015 or Gold deposit bonds issued under the gold deposit scheme (1999).<\/span><\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-types-of-capital-gains\"><strong>Types of Capital Gains<\/strong><\/h2>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">There are two types of <\/span>Capital Gains<span style=\"font-weight: 400;\"> based on the tenure of holding an asset. They are:<\/span><\/p>\r\n\r\n\r\n\r\n<ul>\r\n<li>Short Terms Capital Gains (STCG)<\/li>\r\n<li>Long Term Capital Gains (LTCG)<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-what-are-short-term-capital-gains\"><strong>What are Short-Term Capital Gains?<\/strong><\/h2>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">An asset held for 36 months or less is termed a <\/span>Short-Term Capital Gains<span style=\"font-weight: 400;\"> asset.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-what-is-ltcg\"><strong>What is LTCG?<\/strong><\/h2>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">If the asset is in holding for more than 36 months it is known as <\/span>long term capital gains<span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<p><strong>There are some exceptions to this rule.\u00a0<\/strong><\/p>\r\n\r\n\r\n\r\n<ul>\r\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The holding period of the non-moveable property was changed to 24 months from 1st April 2017. It does not apply to debt-oriented mutual funds or moveable property like jewellery etc. So, property held for 2 years or more, qualify as a Long-Term Asset.<\/span><\/li>\r\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Some assets are considered short-term if they are in holding for 12 months or less. This rule is applied to any asset sold after 10th July 2014( irrespective of the date of purchase). These assets are<\/span>\r\n<ol>\r\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Equity or preference shares in a stock exchange listed company<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Securities listed on a stock exchange in India<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Units of Unit Trust of India, irrespective of being quoted or not<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Equity oriented mutual fund units ( quoted or unquoted)<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Zero-coupon bonds ( quoted or unquoted)<\/span><\/li>\r\n<\/ol>\r\n<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">These assets become long term capital assets if they are held for more than 12 months.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<ul>\r\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">An asset acquired by gift, will, succession or inheritance, the period of holding of the previous owner is also taken into consideration for deciding whether it is an STCG or an LTCG asset.\u00a0<\/span><\/li>\r\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The period of holding of bonus shares or rights shares is counted from the date of allotment of the shares.\u00a0<\/span><\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-what-is-capital-gains-tax-in-india\"><strong>What is Capital Gains Tax in India?\u00a0<\/strong><\/h2>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The profit earned from the sales of any capital asset is an income of the individual or an organisation. They are taxable under Income tax laws. You have to pay the <\/span>Income tax on capital gains<span style=\"font-weight: 400;\"> for the assessment year in which the transfer of the capital asset takes place. The tax paid is known as <\/span>Capital Gains tax<span style=\"font-weight: 400;\">. It does not apply to any inherited property as there is no sale involved in it. But if the person <\/span>sells the property <span style=\"font-weight: 400;\">inherited, he will have to pay <\/span>capital gains tax<span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\" id=\"h-short-term-capital-gains-tax-india\">Short Term Capital Gains Tax India<\/h3>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\">Short term capital gains tax<span style=\"font-weight: 400;\">es are the tax levied on the profit earned from the sales of a capital asset in holding for a period defined by the government as short term. The short term period is different for various assets; For example, the term period for immovable properties like houses or land is considered short term if held for 24 months or less from the 2017-18 financial year.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\" id=\"h-long-term-capital-gains-tax-india\">Long Term Capital Gains Tax India<\/h3>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">The tax levied on the profit earned from the sales of capital assets held for a period that is considered long term by the government. It is generally more than 36 months barring a few exceptions mentioned above.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-capital-gains-tax-calculator\">Capital Gains Tax Calculator<\/h2>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">The calculation of <\/span>Capital Gains Tax<span style=\"font-weight: 400;\"> depends on the type of asset and their holding period.<\/span><\/p>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">To understand <\/span>how to calculate capital gains <span style=\"font-weight: 400;\">tax, we must know some of the terms first:<\/span><\/p>\r\n\r\n\r\n\r\n<ul>\r\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Full value consideration &#8211; It is the payment a seller receives in return for a capital asset. The tax is chargeable in the year of transfer even if no compensation is received.<\/span><\/li>\r\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Cost of acquisition &#8211; It is the value of an asset when a seller acquires it.<\/span><\/li>\r\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Cost of improvement- It is the expenses incurred by a seller in making any additions or alterations to a capital asset. Cost of improvement done before 1st April 2001, will not be taken into consideration. The property acquired in any other way other than direct purchase will add the costs of acquisition and improvement by the previous owner.\u00a0<\/span><\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-income-tax-indexation\">Income Tax Indexation<\/h2>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\">Capital Gains Index<span style=\"font-weight: 400;\">ation is done to adjust the costs of acquisition and improvement values considering the inflation that has taken place over the years.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<p><strong>Indexed costs of acquisition<\/strong><\/p>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Indexed costs of acquisition can be calculated as the ratio of the <\/span>Cost Inflation Index<span style=\"font-weight: 400;\"> (CII) of the year of sale of the asset and the year of acquisition of the property or the financial year 2001-2002 (whichever is later), multiplied by the Costs of acquisition<\/span><\/p>\r\n\r\n\r\n\r\n<p><strong>Indexed Costs of improvement<\/strong><\/p>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">We calculate the Indexed Costs of improvement by multiplying the CII of the year in which the improvement took place by the costs of improvement required.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-short-term-capital-gains-tax-calculator\">Short-Term Capital Gains Tax Calculator<\/h2>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">To calculate the <\/span>short term capital gains tax<span style=\"font-weight: 400;\">, follow the following steps:<\/span><\/p>\r\n\r\n\r\n\r\n<ol>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">\u00a0Start with the full-value consideration<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Deduct\u00a0<\/span>\r\n<ol>\r\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">All the expenses incurred wholly or exclusively in connection with the transfer.<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Cost of acquisition<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Cost of improvement.\u00a0<\/span><\/li>\r\n<\/ol>\r\n<\/li>\r\n<\/ol>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">The result will be the <\/span>Short term capital gain<span style=\"font-weight: 400;\">.<\/span><\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-long-term-capital-gains-tax-calculator\">Long Term Capital Gains Tax Calculator<\/h2>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">To calculate the <\/span>Long term capital gains tax in India<span style=\"font-weight: 400;\">, follow the following steps:<\/span><\/p>\r\n\r\n\r\n\r\n<ol>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">\u00a0Start with the full-value consideration<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Deduct\u00a0<\/span>\r\n<ol>\r\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">All the expenses incurred wholly or exclusively in connection with the transfer.<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Indexed Costs of acquisition<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Indexed Costs of improvement.\u00a0<\/span><\/li>\r\n<\/ol>\r\n<\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Deduct the <\/span>capital gains tax exemptions<span style=\"font-weight: 400;\"> provided under sections 54,54EC, 54F and 54B.\u00a0<\/span><\/li>\r\n<\/ol>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">The result will be the <\/span>Long term capital gains<span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-capital-gains-tax-rates\">Capital Gains Tax Rates<\/h2>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The long term and <\/span>short term capital gains<span style=\"font-weight: 400;\"> tax start from 10% and 15%. The tax rates may change with each accounting year.<\/span><\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\" id=\"h-short-term-capital-gains-tax\">Short Term Capital Gains Tax<\/h3>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The government may apply 15%<\/span> short term capital gains tax<span style=\"font-weight: 400;\"> when securities transaction charges are applicable. When securities transaction tax is not applicable, the <\/span>short term gain<span style=\"font-weight: 400;\"> is added to the <\/span>income tax computations<span style=\"font-weight: 400;\"> of the taxpayer according to his income tax slab.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\">Income tax on capital gains <span style=\"font-weight: 400;\">is applicable if a property is inherited as there is no sale associated. If one sells the inherited property after inheritance, the <\/span>capital gains tax on the property<span style=\"font-weight: 400;\"> is applicable and, the duration will include the holding period of the previous owner.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\" id=\"h-long-term-capital-gains-tax-rate\">Long-Term Capital Gains Tax Rate<\/h3>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The <\/span>LTCG tax<span style=\"font-weight: 400;\"> rate is 10% of the amount that is more than Rs. 1 lakh for equity shares and 20% for all other <\/span>long term capital gains calculators for AY 2020-21<span style=\"font-weight: 400;\">except Equity.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-capital-gains-tax-exemption\">Capital Gains Tax Exemption<\/h2>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">One has to pay a sizeable amount of money as CGT for <\/span>income from capital gains<span style=\"font-weight: 400;\">. One can lower it by availing of the following exemptions provided by the Income Tax Act on <\/span>capital gains:<\/p>\r\n\r\n\r\n\r\n<ol>\r\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Section 54: Provides for exemption on the Sale of House Property and thereafter using the sales proceeds to purchase a different house property.\u00a0<\/span><\/li>\r\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Section 54F: Provides for tax exemption on the <\/span>capital gains<span style=\"font-weight: 400;\"> received due to sales of any other asset apart from house property. It is ideal for people who <\/span>sell the property<span style=\"font-weight: 400;\"> to pay for a new residential property.\u00a0<\/span><\/li>\r\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Section 54EC: Exemption on sale of house property on reinvesting in specific bonds. It is for those who are not interested in buying a new residential property.\u00a0<\/span><\/li>\r\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Invest in <\/span>Capital Gains AccountsScheme<span style=\"font-weight: 400;\"> in approved banks for a minimum of 3 years.\u00a0 It is for people who want to park the money and buy a residential property later.<\/span><\/li>\r\n<\/ol>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-saving-tax-on-agricultural-land\"><strong>Saving Tax on Agricultural Land<\/strong><\/h2>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\">Capital gains<span style=\"font-weight: 400;\"> made from the sale of agricultural land may be entirely exempted from income tax or may not be taxed under <\/span>capital gains<span style=\"font-weight: 400;\"> in some cases, like,\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<ul>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Agricultural land in rural areas is not chargeable to tax.\u00a0<\/span><\/li>\r\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">You can hold agricultural land as stock-in-trade. But, if you buy and sell regularly or for business, <\/span>capital gains tax on the sale of land <span style=\"font-weight: 400;\">will be applicable under Business and Profession.<\/span><\/li>\r\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\">Capital gains<span style=\"font-weight: 400;\"> on compensation received for compulsory acquisition of urban agricultural land are exempted from tax under Section 10(37)of the Income Tax Act.\u00a0<\/span><\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">If your reason for sale is not pertaining to any of the above, then you can look for exemption as per Section 54B.<\/span><\/p>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">Section 54B provides for Exemptions on <\/span>capital gains from the sale of land<span style=\"font-weight: 400;\"> used for agricultural purposes.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<p>Cost Inflation Index<span style=\"font-weight: 400;\"> &#8211; its impact on Capital Gains.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Prices of goods increase over time. The purchasing power of a unit of money decreases due to inflation. This increase in the price of goods and assets due to inflation is estimated year to year by using the <\/span>Cost Inflation Index Chart<span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">The CII = 75%of the average rise in the Consumer Price Index (urban) for the preceding year. The Central Government notifies it.<\/span><\/p>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">for the 2021-22 Financial Year the CII is 317. The base year for CII has been taken as 2001-02 and has an index value of 100.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The CII is used to calculate the <\/span>Indexed Cost Chart<span style=\"font-weight: 400;\"> for Acquisition and Improvement while calculating the <\/span>Long term capital gains tax<span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-capital-gain-highlights-2021\"><strong><strong>Capital Gain Highlights 2021<\/strong><\/strong><\/h2>\r\n\r\n\r\n\r\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The <\/span>capital gains<span style=\"font-weight: 400;\"> made from ULIPs with a premium of over 2.5 lakhs are on par with the equity mutual funds in the Union Budget of 2021. Thus <\/span>capital gains<span style=\"font-weight: 400;\"> from Such ULIPs issued on or after 1st February 2021 will be treated as <\/span>capital gains<span style=\"font-weight: 400;\"> and taxed accordingly. ITR forms pre-filled with details on dividends, interest and <\/span>capital gains<span style=\"font-weight: 400;\"> will be made available to make it easy for taxpayers.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-you-might-also-like\">You Might Also Like<\/h2>\r\n\r\n\r\n\r\n<ul class=\"wp-block-yoast-seo-related-links\">\r\n<li><a href=\"https:\/\/www.squareyards.com\/blog\/simple-ways-for-nri-to-sell-property-in-india\">Simple ways for NRI to sell property in India<\/a><\/li>\r\n<li><a href=\"https:\/\/www.squareyards.com\/blog\/a-guide-to-long-term-capital-gains-on-sale-of-property\">A guide to long term capital gains on sale of property\u00a0<\/a><\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-frequently-asked-questions-faq-s\">Frequently Asked Questions (FAQ&#8217;s)<\/h2>\r\n\r\n\r\n\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h3>What is the Capital Gains Tax for 2021?<\/h3>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\r\n\r\n\r\n<p>The Capital Gains Tax in 2021 on the LTCG and STCG are 20% and 15%.<\/p>\r\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h3>How much is the capital gains tax in the US? <\/h3>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\r\n\r\n\r\n<p>In the USA, long term capital gains tax is applicable if the assets in holding are for more than one year at rates of 0%, 15%and 20% depending on the income slab of the person.<\/p>\r\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h3>How is capital gains tax calculated?<\/h3>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\r\n\r\n\r\n<p>1. For Short term capital gains tax<br \/>STCG = full value consideration received -(cost of acquisition +cost of improvement eg cost of transfer)<\/p>\r\n\r\n\r\n\r\n<p>2. For Long term capital gains tax<br \/>LTCG = total value consideration received -(indexed cost of acquisition +indexed cost of improvement+ cost of transfer)<\/p>\r\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h3>What is Capital Gain in Income Tax?<\/h3>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\r\n\r\n\r\n<p>Capital gains are the profit earned over your purchase value on selling any capital asset. The profit earned is considered as an income and is taxable.<\/p>\r\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h3>How do I avoid capital gains tax on property?<\/h3>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\r\n\r\n\r\n<p>Avail of the exemptions provided under sections 54,54EC, 54F, 54B or invest in capital gains accounts scheme.<\/p>\r\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h3>How to calculate capital gains tax on the sale of a property?<\/h3>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\r\n\r\n\r\n<p>Capital gain tax is calculated by deducting the sum of the following costs from the final sale price of the property:<br \/>1. Acquisition cost ( indexed for LTCG)<br \/>2. Home Improvement cost ( indexed for LTCG)<br \/>3. Transfer cost<\/p>\r\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\n<script type=\"application\/ld+json\">\n\t{\n\t\t\"@context\": \"https:\/\/schema.org\",\n\t\t\"@type\": \"FAQPage\",\n\t\t\"mainEntity\": [\n\t\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"What is the Capital Gains Tax for 2021?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\r\n\r\n\r\n<p>The Capital Gains Tax in 2021 on the LTCG and STCG are 20% and 15%.<\/p>\r\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t,\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"How much is the capital gains tax in the US? \",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\r\n\r\n\r\n<p>In the USA, long term capital gains tax is applicable if the assets in holding are for more than one year at rates of 0%, 15%and 20% depending on the income slab of the person.<\/p>\r\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t,\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"How is capital gains tax calculated?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\r\n\r\n\r\n<p>1. For Short term capital gains tax<br \/>STCG = full value consideration received -(cost of acquisition +cost of improvement eg cost of transfer)<\/p>\r\n\r\n\r\n\r\n<p>2. For Long term capital gains tax<br \/>LTCG = total value consideration received -(indexed cost of acquisition +indexed cost of improvement+ cost of transfer)<\/p>\r\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t,\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"What is Capital Gain in Income Tax?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\r\n\r\n\r\n<p>Capital gains are the profit earned over your purchase value on selling any capital asset. The profit earned is considered as an income and is taxable.<\/p>\r\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t,\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"How do I avoid capital gains tax on property?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\r\n\r\n\r\n<p>Avail of the exemptions provided under sections 54,54EC, 54F, 54B or invest in capital gains accounts scheme.<\/p>\r\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t,\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"How to calculate capital gains tax on the sale of a property?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\r\n\r\n\r\n<p>Capital gain tax is calculated by deducting the sum of the following costs from the final sale price of the property:<br \/>1. Acquisition cost ( indexed for LTCG)<br \/>2. Home Improvement cost ( indexed for LTCG)<br \/>3. Transfer cost<\/p>\r\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t\t\t\t]\n\t}\n<\/script>\n","protected":false},"excerpt":{"rendered":"<p>What are Capital Gains Taxes?\u00a0 The basic requirements for Capital Gains are: Existence of a Capital Asset Transfer or Sale of such Capital Asset Profit earned from such transfer. Sometimes, when the capital asset depreciates and is sold at a value lower than the original purchase price, we say a capital loss is incurred. What [&hellip;]<\/p>\n","protected":false},"author":21,"featured_media":32016,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[210],"acf":[],"_links":{"self":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/32013"}],"collection":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/users\/21"}],"replies":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/comments?post=32013"}],"version-history":[{"count":12,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/32013\/revisions"}],"predecessor-version":[{"id":61182,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/32013\/revisions\/61182"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/media\/32016"}],"wp:attachment":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/media?parent=32013"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/categories?post=32013"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}