The central government is considering making slight changes in the rules of capital gains tax for debt mutual funds to give some relief to Bharat Bond Exchange Traded Fund (ETF). The issue came up in a meeting held in the Finance Ministry last week. The reason for this is that the government is planning to issue a new part of Bharat ETF in the current financial year.

According to the Economic Times report, the official says that the matter is still being deliberated upon. A final decision will be taken on this when the government finalizes the budget. The official said that from April 1, 2023, Bharat ETF is taxed at slab rates like any other debt mutual fund. This can be a disappointing factor for investors. The Finance Bill 2023 changed the tax structure for debt mutual funds.

Also Read: EPFO subscribers alert! EPFO has decided to stop Covid-19 advance withdrawal. Details Here

Before 2023, the tax that was levied on debt funds was determined by the holding period. In a case where the holding period was more than 36 months, capital gains tax was exempted. Short-term capital gains tax was levied for holding period of less than 36 months. As per the income tax amendments, the tax benefit under indexation on calculation of long-term capital gains on investments in debt mutual funds ceased to be available from April 1, 2023. After this date, investments in all types of debt mutual funds are counted in the short-term category.

Tax exemption

However, after the changes made in the Finance Bill, debt mutual funds with equity investment less than 35% are taxed at the income tax rate applicable in your slab. The official said that there is a thought to give tax exemption to Bharat Bond ETF. The official said that DIPAM (Department of Investment and Public Asset Management) will now send a formal recommendation in this regard to the Revenue Department after the formation of the government.

Finance ministry officials will also meet officials of public sector undertakings (PSUs) to assess their fund requirements in the current fiscal year. The Bharat Bond Exchange Traded Fund (ETF) holds bonds issued by CPSEs, CPSUs, central public financial institutions (CPFIs) and other government organisations and three private companies. After its launch in 2018, these institutions have issued bonds using the ETF platform since 2019 and raised debt worth ₹33,400 crore.

The post Capital Gain Tax: There may be exemption in capital gains tax for debt MF, Know what will be the benefit first appeared on Rightsofemployees.com.

It is being claimed in many media reports that this time the government is preparing to make big changes for the taxpayers. Sources claim that in the budget to be presented in February, there is a preparation to change the ‘capital gains tax’ on equity shares, bonds and real estate. This decision can be taken to remove the difference in different rates of tax and the period of holding the property.

Possibility of change in capital gains tax

There is also a possibility of change in capital gains tax in the new financial year. Let us tell you that under the Income Tax Act, the profit from the sale of capital assets (both movable and immovable) comes under the tax category. At present, 10 per cent tax is payable on gains arising from holding shares or property for one year or less. Similarly, the tax on profit on holding shares or property for two to three years increases from 10 to 20 percent.

More than 6.85 crore income tax returns filed

For the financial year 2021-22, more than 6.85 crore income tax returns have been filed so far. This figure can increase till 31 December. A senior officer gave this information. The last date for filing Income Tax Return (ITR) for FY 2021-22 in the individual category was July 31, while for corporate and others who need to get their accounts audited, the date was November 7, 2022.

What is capital gains tax?

The government collects ‘Capital Gains Tax’ on the profits made on any property. Generally, tax is payable on capital gains arising on the sale and purchase of property. For example, if you bought a house worth 10 lakhs and sold it after one year for 12 lakhs, then you will have to pay 10 percent tax on the profit of 2 lakhs.

The post Capital Gain Tax: Big news ! There will be a big announcement for taxpayers in Budget 2023! Government is going to make this change first appeared on Rightsofemployees.com.

The tribunal said that even if the person has spent this amount in cash, then exemption can be claimed on it. This case was related to the tax levied on the capital gain tax on the sale of flats. Experts believe that unaccounted money was not used in the payment in this case and the taxpayer was not doing any business. That’s why the court gave such an order.

Capital gains are taxed

As per the tax rules, capital gains are calculated on the basis of sale amount minus cost of acquisition and cost of improvement. Both of these are calculated on the basis of Cost Inflation Index. Higher the cost of these two components, lower will be the taxable capital gain and tax will be levied on the basis of this calculation. The cost of acquisition includes the cost of the house, registration fees and broker’s fees. Capital expenditure is included in the cost of improvement, which increases the value of the property.

This is the case

NRI Komal Gurmukh Sangtani and her husband had appealed in ITAT. This case pertains to the financial year 2009-10. Sangtani said that he had to upgrade the flat to make it habitable. Normally in such cases the payment is made in cash only. Sangtani had claimed to include interest of Rs 5.5 lakh on the home loan as cost of acquisition. ITAT in its order said that the taxpayer may have claimed this interest under the head of income from house property. The tribunal has referred the matter to the IT officer for re-verification.

Tax on sale of house

You must pay a capital gains tax on capital gains due from selling any asset. Taxes to benefit the sale of a home are calculated in two ways. If you sold a house after storing it for two years, it would be considered a long-term capital gain. Long-term capital gains collect capital gains tax of up to 20%. But if you sold a house before 24 months, this short term will be considered as a short term capital gain. If you have done IT improvement or expansion after purchasing the property, then income tax can be issued by charging an index fee of the expense. This will reduce the capital gains tax burden.

The post Income Tax: Income tax exemption will be available on repairing the house, the court has given a big decision first appeared on Rightsofemployees.com.