Long Term Capital Gains Computation with base year 2001

Budget 2017 has proposed a slew of benefits related to long-term capital gains. The most important is the shift of the base year to be used for long-term capital gains computation for all asset classes. Here is a summary and illustration of long-term capital gains computation with base year 2001.

1: Change in duration for computation of capital gains

Gains from the sale of immovable property (land or building) after a holding period of 2 years will now qualify for long-term capital gains. Earlier this was three years. read more

Budget 2017: Tax benefit illustration

The government has proposed to decrease the tax for those earning between 2.5 Lakh to 5 Lakh per anum to 5% from 10%. This is a welcome move and would benefit all tax slabs.  Here is an illustration.

For those in 30% tax slab

Net taxable income after considering all applicable deductions = 15 Lakh.

OLD SLAB: Total Tax before cess = 25,000 (10% slab) + 1,00,000 (20% slab) +1,50,000 (30% slab) = 2,75,000

That is 10% of 2.5L + 20% of 5L + 30% of (amout  above 10L) = 2.75L read more