As we are nearing end of Financial year, note these points to save Capital gains tax
(Long term capital gains/loss = For holding period more than 1 year
Short term capital gains/loss = For holding period less than 1 year)
- 1 lakh profit in a Financial year is exempt as Long term capital gains. So book profits in shares & mutual funds together upto 1 lakh, and reinvest
- If profits are more than 1 lakh, check if you can book loss in any of the holdings to set off. You can buy back the next day
- Short term capital gains are taxed at 15%, book losses and buy back next day to set off any profits.
- Both Long and short term losses can be carried forward for 8 years. So booking losses can help save future taxes. ( Make sure you file IT returns on time)
- LTC losses can be set off against LTCG only. STC losses can be set off against ST and LT capital gains
- Futures & Options profit /loss will be taxed along with normal tax slab