Amit Maheshwari Partner, AKM Global replies: Since you have income from stock trading, you will need to use ITR-2 to file your tax return. However, if you are doing any intra-day trading, it shall be treated as speculative business and you will need to file your return in ITR-3. Other than that, the gain or loss generated through stock trading will need to be classified as short term (STCG for shares held up to an year) or long term (LTCG for shares held for more than an year). The STCG shall be taxed at 15% and LTCG shall be taxed at 10%. However, LTCG up to Rs 1 lakh a year will be tax free. Also, the LTCG for shares purchased on or before 31 January 2018 shall be grandfathered —the gains made up to this date shall not be taxed.
I bought a flat four years ago in Delhi, on loan from SBI. I had booked another flat in Gurgaon and it is now ready for possession. I want to sell this flat. I want to return my existing housing loan from the proceeds of this sale. What will be my tax liability?
Homi Mistry Partner, Deloitte India replies: If you will sell the right to the house before taking possession, the gain will qualify as long term capital gain if you have held the right for at least three years and will be subject to tax @ 20% (plus applicable surcharge and cess). Otherwise it will be taxed at your applicable slab rate as short term capital gain. If you take possession of the house and then sell it immediately, it is more likely to be treated as a short term capital gain, subject to tax at slab rates.
Depending on the exact facts of your case, it may still be possible to take a position that the house is a long term capital asset but this position can lead to litigation. Using the proceeds from this sale for paying off the loan on the older house will not result in any tax savings since the older house was purchased more than a year before the proposed sale.