STCG On Listed Shares Are Taxed Flat At 15%

Profits on sale of listed shares are treated as long-term capital gains (LTCGs) if the shares are held for more than 12 months. If the same are sold within 12 months from the date of acquisition, the profits are treated as short-term capital gains (STCGs).

LTCGs in respect of listed shares on which securities transaction tax (STT) has been paid are taxed at a flat rate of 10 per cent after the initial Rs. 1 lakh (on which nil tax is levied). The STCG on such shares are taxed at flat rate of 15 per cent.

In case you are a resident of India for taxation purposes, you will be entitled to set off any shortfall in respect of the basic exemption limit. You will be entitled to set off such shortfall in basic exemption limit against such STCG and all LTCG. The basic exemption limit is Rs. 2.50 lakh for those aged below 60 years, Rs. 3 lakh for those aged between 60 years and 80 years, and Rs. 5 lakh for all those who have completed 80 years of age. But these exemptions with respect to age will be applicable only under the old tax regime.

The basic exemption limit under new tax regime irrespective of your age is Rs. 3 lakh. So, in case you do not have any other income except the STCG on listed shares, you will have to pay tax at the rate of 15 per cent on the STCG as reduced by the basic exemption limit applicable to you.

Moreover, you can claim tax rebate up to Rs. 12,500 under Section 87A of the Income-tax Act, 1961 against your tax liability in respect of all incomes, except for LTCG on listed shares, if you opt for the old tax regime, and your net taxable income does not exceed Rs. 5 lakh. In case you opt for the new tax regime, you can claim rebate under Section 87A up to Rs. 25,000 against all your tax liability, except for tax on LTCG on listed shares sold on the stock exchange, on equity-oriented schemes, and where your net taxable income does not exceed Rs. 7 lakh.

A taxpayer is entitled to claim a standard deduction of 30 per cent from the rent received on house property. No separate deduction is available for expenses incurred on renovation of your house. However, you can add the cost of such renovation to the cost of your house and claim the same whenever you sell the house for computation of capital gains.

In case you have borrowed money for the purpose of this renovation and are paying interest on such loans, you can claim such interest under Section 24(b) within the overall limit of Rs. 2 lakh if the house is self-occupied and you opt for the old tax regime. But if you opt for new tax regime, then no benefit is available on such interest paid.

In case the house is let out, you can claim deduction for full interest paid by you, and you can set off up to Rs. 2 lakh under house property head against other income during the same year under the old tax regime. No such set-off is available in case you opt for new tax regime.