Capital Gains is a profit or loss from selling a movable or immovable capital asset. A capital asset includes movable assets, immovable assets, and tangible/intangible assets, etc. A taxpayer needs to have certain documents to calculate Capital Gains. There are two kinds of Capital Gains:
- Long Term Capital Gains (LTCG)
- Short Term Capital Gain (STCG)
Documents for Capital Gains
PAN
Income Tax Department (ITD) issues Permanent Account Number (PAN). It is an alphanumeric ID of a taxpayer who is liable to pay taxes. PAN enables the department to link all transactions of the “Person” with his “Income”. Hence it is the most essential document while filing ITR.
Aadhaar
Aadhaar (Aadhaar Card) a 12 digit unique identification number issued by the UIDAI (Unique Identification Authority of India). It is mandatory for Resident Individuals to provide details of Aadhaar while filing ITR.
Capital Gain Statement
Following details are required to calculated Capital Gains and file ITR:
- Purchase date
- Sale date
- Period of holding the asset
- Transaction or brokerage charges (if any)
Form 16
Any salaried individual, whose TDS has been deducted from his salary by the employer, receives Form 16 from his/her employer. It is a detailed statement that shows the salary earned during a Financial Year along with deductions, exemptions, and tax deducted from the salary in that year.
Form 26A
Form 26AS is a consolidated Tax Credit Statement. It provides the following details to a taxpayer.
- Details of taxes deducted from the taxpayer’s income.
- Details of taxes collected from taxpayer’s payments.
- Advance Taxes, Self Assessment Taxes and Regular Assessment Taxes paid by the taxpayers.
- Details of the refund received during the year.
- Details of any high-value transactions (for eg. Shares, Mutual Funds, etc.).
It is very important to check Form 26AS before e-filing the ITR. Because no one would want their tax credits to be unclaimed.
Investment Proofs
A taxpayer can claim the deduction of certain Investments and expenses while filing ITR. Investments proofs are required to claim Chapter VI-A deductions. These investments reduce the net taxable income of a taxpayer.
FAQs
Yes. Any property sold in India is subjected to tax deduction. The tax rate is 20% in the case of Capital Gains from Long Term property. And normal slab rate in case of Short Term Capital Gains.
Capital losses can only be set off against capital gains. It can not be set off against any other income. Short term capital losses can be set off against short or long term capital gain. However, long term capital losses can only be set off against long term capital gains
Following are the documents required to file ITR:
-PAN
-Aadhaar
-Form 26AS
-Bank Account Details
-Tax Payment Challan
-Original Return (if filed)
All PAN holders should ideally file their ITR. However, If your income is more than rupees 2.5 lakh p.a then you are required to file your ITR.
