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Samkit Maniar | Answer |Ask -Follow

Tax Expert - Answered on Mar 12, 2024

CA Samkit Maniar has eight years of experience in income tax, mergers and acquisitions and estate planning.
He has graduated from Mumbai’s N M College of Commerce and Economics and has completed his CA from The Institute of Chartered Accountants of India."... more

Question by Oruganti on Feb 27, 2024Hindi

My name O S Rao. I am 76 years old. I have an income from interest about 2.5 lakhs per annum. Around 7th February, I redeemed around 18 lakhs from my MF account and reinvested again in the same fund next week. The statement issued by Asset management company shows a capital gain of Rs 6.50 Lakhs Long term Capital gain. Now my questions are: 1) what is my tax liability for financial year 2023-24? 2) Do I have to pay advance tax on capital gain amount before 31st March 2024?

Ans: Depending upon the tax regime you choose, your tax liability may vary. If you are taking income tax deductions by investing in PPF, NPS etc then those need to be factored in.

As far as advance tax liability is concerned, considering you do not have any business income and you are over 60 years of age, you are not required to pay advance taxes.

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

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Question by Ramesh - Jun 09, 2022Hindi

It's very informative to read your column in Rediff. I have some queries I hope you can help me with: I have not worked since 2017, and there is no income. But I have some investments in equities and equity MFs long term. Hope to hear your valuable answers on these questions. My questions are: 1. If I redeem my MF how is the capital gain tax computed? I know that 10% is the tax on the gains. But since I have no income and as there is no tax for earning till 2.5 Lakh, and additionally 1 lakh (or is it 1.5lakh) on equity MF redemptions, can I deduct 3.5 lakh from the amount received through gains and apply 10% tax on remaining? Anil Rego::The basic exemption can also be claimed additionally. 2. Also, what is the difference in terms LTCG on long term equities, long term equity MFs and long term balanced MFs? Anil Rego::Balanced MFs with equity holding above 65% and equity MFs, both are treated as equity funds and will be taxed as equity fund. Balanced funds with equity less than 65% will be treated similar to debt funds (non-equity). 3. Can long term loss in equity sale be adjusted with long term gain of equity MF or only with similar equity gains? Please advise.

Ans: Yes, Long Term Capital Loss can be set off only against Long Term Capital Gains.

4. In case I withdraw my PF after the age of 58, is the amount not subject to tax?

It is not clear if you plan to start working again. Your EPF withdrawals post-retirement will be tax-free for up to 3 years after the account is inactive.

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Question by anand - Jun 01, 2021Hindi

I seek your expert advice on the following: 1. I am retired Government servant (MP) since 2006-age 76 with only income from pension 2. This year I had closed my PPF account and redeem TATA mutual fund TINFD -the amount is deposited in my Sbank account 3. I would like to know will there be any tax liability covering short/long term capital gain on the amount received. Hope you will provide me necessary advice

Ans: We suggest consulting a CA regarding the same.

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Question by Ganesh - Jul 13, 2021Hindi

Thank you for all the advice in your column which I find very interesting. I have recently redeemed some mutual fund equity investments that fall into two categories. The first set are those I held for nearly 9 years and the second set is recent vintage as its average holding age is under 4 years. 1. What is the capital gains tax that I have to pay and how is it computed? 2. Is the exemption amount of Rs 2 lakhs available for capital gains also? 3. How to pay the CG tax amount and when is it due for payment? Many thanks for your advice.

Ans: Answer for 1 and 2

Short-term capital gains on redeeming your equity fund units within a holding period of one year are taxed at a flat rate of 15%, irrespective of your income tax bracket. Those funds exceeding one year holding period is treated as a long-term capital gain. The LTCG are exempted from tax up to Rs. 1,00,000 and any LTCG exceeding this limit shall attract a LTCG tax of 10%, and there is no indexation.

3. Paying capital gains is same as paying regular income tax. You have to go to the Income Tax India website and pay tax using challan ITNS 280.

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