1. Capital gain, Advance taxes &
TDS
By –
Shweta
Shreeya
Bisahu
Bhuneshwari

3. Tax on Capital Gains
• Existence of a capital asset
• Transfer of such asset during the Previous
Year.
• Profit and Gain must arise from such transfer

4. What is a Capital Asset ?
• Capital asset means property of every
description.
• It may be ;
– Movable or immovable
– Tangible or intangible

5. What is not a Capital Asset?
Section 2(14)
• Any stock-in-trade, consumable stores or raw
materials held for the purpose of business or
profession.
• Personal effects (except jewellery &
immovable property) held for personal use of
the tax payer or any member of his family.
• Agricultural land in India subject to exception.

6. Computation of STCG
• Full value of consideration received or accruing
• Less
– Expenditure incurred wholly and exclusively in connection
with such transfer
– Cost of acquisition
– Cost of improvement is
• Gross short term capital Gain
• Less : Exemption u/s 54B/54D/54G is Net Short Term
Capital Gain which is taxable..

7. Computation of LTCG
• Full value of consideration received or accruing
• Less :
– Expenditure incurred wholly and exclusively in connection
with such transfer
– Indexed cost of acquisition
– Indexed cost of improvement is
• Gross Long Term Capital Gain
• Less: Exemption available u/s
54/54B/54D/54EA/54EB/ 54EC/54F/54G is
Net Long Term Capital Gain which to be taxed.

8. Cost of Acquisition in various
circumstances
• The cost of acquisition of any property
acquired prior to 01-04-1981 will be the fair
market value of that property as on 01-04-
1981 at the option of the assessee .
• The same rule applies to capital assets
acquired by any of the modes specified in
Section 49(1), if the capital asset is acquired
by the previous owner prior to 01-04-1981.

9. Cost of Acquisition to previous
owner
• Cost of acquisition & improvement to previous
owner will be deemed to be cost of acquisition and
improvement if the asset is acquired by the following
mode of transfer:
– By succession, inheritance etc.
– By distribution of an asset by liquidation
– Under a gift/will
– On partial/total partition of HUF

10. Conclusion
• any profits or gains arising from the transfer of
a capital asset effected in the previous year
• capital gain is the difference between the cost
of acquisition and the fair market value on the
date of sale or transfer of asset.
• If it is a short term loss so it can be adjusted
from long term gain.
• If it is a long term loss so it can not be
adjusted from short term gain.

12. Advance Tax
• it refers to paying a part of your yearly taxes in
advance.
• Advance tax is the income tax payable if your
tax liability exceeds Rs 10,000 in a financial
year.
• Advance tax should be paid in the year in
which the income is received.
• Hence, it is also known as the 'pay-as-you-
earn' scheme.

13. Cont…
• Advance tax is applicable when an individual
has sources of income other than his/her
salary.
• For instance, if one is earning through capital
gains, interest on investments, lottery, house
property or business, the concept becomes
relevant.

14. Advance Tax installments
and due dates

15. For corporate tax-payers
• 15th June – 15% of estimated taxes
• 15th September – 45% of estimated taxes
• 15th December – 75% of estimated taxes
• 15th March – 100% of estimated taxes.

16. For non-corporate tax-payers
• 15th September – 30% of estimated taxes
• 15th December – 30% of estimated taxes
• 15th March – 40% of estimated taxes.

17. How to pay Advance Tax
• All tax-payers are required to get their
accounts audited u/s 44AB (Tax audit) and all
companies (irrespective of the turnover) are
mandatorily required to make electronic
payment of taxes through internet banking
facility or through credit or debit cards.
• Other tax-payers can make either online tax
payment or through normal banking (by way
of cheque/cash)

18. Consequences of Non-Payment
of Taxes
• Under Section 243C, the tax-payer will have to
pay a simple interest on the amount of short
payment (or non-payment) @ 1% per month
for 3 months.
• Interest u/s 234C shall not be payable if the
advance tax payable is less than Rs.10000

19. Cont…
• Even one day delay attracts Interest u/s 234C
• Apart from interest as explained above, if
entire tax liability has not been paid before
31st March, tax payer will have to pay interest
@ 1% for every month or part of the month
from April 1 to the date of actual payment.

20. What happens if you pay more
taxes?

21. Conclusion
• The taxpayer is also saved from the burden of
making a lump sum payment at the time of
filing the return.
• It is advisable to pay advance tax as per the
due dates on the estimated income
• It is advisable to pay the taxes online through
net banking or through cards. Those who
don’t have net banking facility may get one
soon

22. Cont…
• Pay taxes through your own account. It will be
easy to track or trace the payment from your
bank account
• Check 26AS and confirm that the taxes paid by
you are credited to your account at income tax
department
• Don’t wait for the last day to pay the taxes.
Pay it off at the earliest possible date.

24. Introduction
• Two broad head of levy of tax are
– Direct levy and
– Tax deduction at source
• Deduction of tax at source is a convenient method of
tax collection
• is less painful to the person from whose income such
tax is deducted
• saves time on the part of the income-tax department

25. Cont…
• Tax deduction is the responsibility of the person
making the payment i.e.
– Employer in the case of salary paid to employee
– payer of interest i.e. borrower
– In the case of winnings from lottery, crossword puzzles,
horse races, as the person who makes the payment
– In all other cases too the payer of the income

26. Incomes subject to TDS
• Salary income (s.192)
• Interest on securities (s.193)
• Dividends (s. 194)
• Interest other than interest on securities (s.
194A)
• Winnings from lottery or crossword puzzles (s.
194B)

27. Cont…
• Winnings from horse races (s. 194BB)
• Payments to contractors or sub-contractors (s.194C)
• Insurance commission (s.194D)
• Payments to non-resident sportsmen or sports
associations (s.194E)
• Payments in respect of deposits under national
savings scheme etc. (s.194EE)
Slide 5.1

28. Cont…
• Payments in respect of repurchase of units by
mutual fund or unit trust of India (s.194F)
• Commission on sale of lottery tickets (s.194G)
• Commission, brokerage etc. (s.194H)
• Rent (s.194I)
• Fees for profession-al or technical services [Sec.
194J]
Slide 5.1

29. Cont…
• Income in respect of units [Sec. 194K]
• Payment to non-resident [Sec. 195]
• Units held by an Off-shore Fund [Sec. 196B],
• Income from foreign currency bonds [Sec.
196C]
• Income of Foreign Institutional Investors from
securities [Sec. 196D]
Slide 5.1

30. Conclusion
• TDS is one of the modes of collection of taxes
• It is similar to "pay as you earn" scheme
• It facilitates sharing of responsibility of tax
collection between the deductor and the tax
administration
• It acts as a powerful instrument to prevent tax
evasion as well as expands the tax net.

31. Thank
You