Capital Gain Calculator
The calculation of capital gain and losses require a taxpayer to know a few terms and the conditions applicable to capital gains tax. This makes it quite difficult to compute the final tax payable. Scripbox offers an easy to use simple online tool, Capital gain calculator. This online calculator will help you estimate the short term and long term gains/ losses along with tax payable.
Table of contents
- What is Capital Gain?
- How To Use Scripbox’s Capital Gain Tax Calculator?
- How Can Scripbox’s Capital Gain Tax Calculator Help You?
- Capital Gain Tax on Assets
- Long Term Capital Gain Tax & Short Term Capital Gain Tax on Mutual Funds
- Short Term Capital Gain Tax Calculator
- Long Term Capital Gain Tax Calculator
- Frequently Asked Questions
What is Capital Gain?
A capital gain arises when a taxpayer transfers or sells a capital asset belonging to him. The profit or loss from the sale of the asset is capital gain or loss. The gain comes under the income category and hence a taxpayer needs to pay tax on the capital gain. Here the sale of an asset is a prerequisite to capital gain. When a taxpayer inherits an asset or receives a gift, it is a transfer of ownership. It is not a sale of an asset, there is no exchange of money in cash or kind. Hence this transfer of ownership does not qualify for capital gain.
What is an Asset?
Under the Income Tax Act, 1961 a capital asset is any asset irrespective of being held for business or personal use. It may be movable, immovable, tangible or intangible, fixed or circulating. These assets include land and house property, shares and stocks, bonds and debentures, mutual funds, and trademarks.
How To Use Scripbox’s Capital Gain Tax Calculator?
The capital gain tax calculator helps you calculate the tax payable on the below-mentioned assets:
- Shares and stocks
- Equity- oriented mutual funds
- Debt-oriented mutual funds
- Gold ETF
You need to input the below information:
- Type of asset sold. Select from the given drop-down
- Asset sold date
- Asset bought date
- The Net selling price
- The Net buying price
While, Net selling price:- The price at which the asset is being sold minus the charges incurred to sell the asset.
On the other hand, Net buying price:- The price at which the asset is purchased minus the incurred to buy the asset
The capital gain calculator will provide the below output:
- Asset holding period
- Indexed buying price
- Type of capital gain
- Capital gain/ loss
- Effective tax rate
- Tax payable
How Can Scripbox’s Capital Gain Tax Calculator Help You?
While calculating the capital gain on stocks and mutual funds, taxpayers need to keep in mind a few things. The applicable tax rate, holding period, type of asset, cost of indexation, net purchase cost, nest sale price, and so on.
The computation of the final tax payable value can be confusing and tedious sometimes. Our capital gain calculator helps you compute the tax payable while you only need to enter the basic details. An online calculator that is easy to use helps you determine the capital gain earned as well.
You can also use Scripbox’s income tax calculator to estimate the final tax payable. The income tax calculator calculates the tax payable after considering the income under all the heads and deductions. This will help you in also estimating the advance tax payable. A delay or default in paying the advance tax leads to interest payable at the time of tax filings.
Capital Gain Tax on Assets
Once a taxpayer sells an asset, he/ she incurs a capital gain. Now the type of capital gain and taxability depends on the holding period of the asset.
The holding period is the tenure for which the asset is held by a taxpayer. For instance, Mr.Arun bought land on the 10th of December 2017 and sold the land on the 10th of December 2019, he was holding the land for a tenure of 24 months. This is the holding period of the land i.e 24 months
There are 2 types of capital gains .i.e short term capital gains and long term capital gains.
Short Term Capital Gain (STCG)
Short term capital gains arises when an asset is held for less than 36 months. The period of 36 months is not valid across all the types of assets, There are assets with 24 months and 12 months tenure to qualify as an STCG.
Long Term Capital Gain (LTCG)
A long term capital gain arises when an asset is held for more than 36 months. These 36 months are calculated from the date the asset was bought by the taxpayer.
Following table explains the type of gain for each asset’s basis on the holding period
|Asset||Short Term Capital Gains||Long Term Capital Gains|
|Listed Equity or Preference Shares||Period of Holding < 12 months||Period of Holding > 12 months|
|Units of Equity Oriented Mutual Funds||Period of Holding < 12 months||Period of Holding > 12 months|
|Units of UTI||Period of Holding < 12 months||Period of Holding > 12 months|
|Zero Coupon Bond||Period of Holding < 12 months||Period of Holding > 12 months|
|Other Listed Securities||Period of Holding < 12 months||Period of Holding > 12 months|
|Unlisted Shares||Period of Holding < 24 months||Period of Holding < 24 months|
|Debt Oriented Mutual Funds*||Period of Holding < 36 months||Period of Holding < 36 months|
|Immovable Property||Period of Holding < 24 months||Period of Holding < 24 months|
|Other Capital Asset||Period of Holding < 36 months||Period of Holding < 36 months|
*Note: From 1st April 2023, the capital gains from debt-oriented mutual funds will be taxable as per the investor’s income tax slab rate. This is irrespective of the investment holding period.
Long Term Capital Gain Tax & Short Term Capital Gain Tax on Mutual Funds
The taxability is different for equity funds and debt funds. A mutual fund is an equity-oriented fund is the asset allocated to equities is more than 65% of the total portfolio.
|Fund||Short Term Capital Gains Tax||Long Term Capital Gains Tax|
|Equity Funds||15%||Capital gain < 1 lakh- Exempt|
Capital gain > 1 lakh- 10%
|Debt Funds*||Applicable slab rate||20% with indexation|
*Note: As per the Finance Bill 2023, debt mutual funds will no longer have the LTCG benefit. Capital gains arising from invested in debt mutual funds from April 1st 2023, will be taxable as per the investor’s income tax slab rate, irrespective of the holding period.
Short Term Capital Gain Tax Calculator
Illustration of Short Term Capital Gain Tax Calculation
Amit bought 200 shares of Reliance Industries Limited in December 2019 at a cost of Rs. 1300 per share and sold the same in January 2020 for Rs. 1500. He did this transaction through a broker who charged a commission of Rs. 30.
Here is how you can calculate tax on capital gains in this case:
|The full value of the consideration received (200 shares @ Rs 1500 per share)||Rs 3,00,000|
|Less: expenditure incurred in connection with such sale (brokerage)||Rs 30|
|Net sale consideration (A)||Rs 2,99,970|
|Less: cost of acquisition (200 shares @1300 per share) (B)||Rs 2,60,000|
|Short-term capital gain(C=A-B)||Rs 39,270|
|Period of holding||1 month|
|Rate of tax||15%|
|Tax payable||Rs 39,270 * 15%= Rs 5891|
Long Term Capital Gain Tax Calculator
Illustration of Long Term Capital Gain Tax Calculation
Suppose Amit had invested in debt-oriented mutual funds in April 2016 and the investment amount was Rs. 1,00,000 at a NAV of Rs. 10 and decided to redeem the same in July 2019 say at a NAV of Rs. 20
In the above case, the gains arising from the sale will be considered as long term capital gain and the benefit of indexation will be allowed while computing the capital gain.
Here’s how to calculate capital gains tax in such a case:
|The full value of the consideration received (10,000 units @ Rs 20)||Rs 2,00,000|
|Sale consideration(A)||Rs 2,00,000|
|Less: Indexed cost of acquisition||Rs 1,09,470|
|Long-term capital gain(C=A-B)||Rs 90,530|
|Period of holding||More than 36 months|
|Rate of tax||20%|
|Tax payable||Rs 90,530 * 20%= Rs 18,107|
Indexed cost of acquisition will be calculated as below :
Cost of acquisition * (CII of the year in which units are sold/CII of the year in which units are purchased)
= (Rs 1,00,000)*(289/264)
= Rs 1,09,470
Indexed cost is arrived at when the price is adjusted against the rise in inflation in the asset’s value. For calculating the indexed cost of acquisition, we use the CII notified by the Income Tax Act, 1961.
Frequently Asked Questions
The below are the exemptions on capital gains
Section-54, capital gains exemption on the sale of one house property. The tax exemption is allowed if the salesproceeds are utilized to buy another house property
Section-54F, capital gains exemption on the sale of any asset. And the sale proceeds are utilized to buy a house property
Section-54EC, capital gains exemption on the sale of a house property. And the sales proceeds are invested in specific bonds. These bonds are issued by the National Highway Authority of India (NHAI) or Rural Electrification Corporation (REC). The tax exemption is allowed only on fulfilling the condition
As a thumb rule, any capital loss can be set-off only against a capital gain. A capital loss cannot be set-off against any other source of income. A short term capital loss can be set-off against a short term capital gain as well as a long term capital gain. Whereas a long term capital loss can only be set-off against a long term capital gain.
A capital loss can be carried forward up to 8 assessments years from the year in which loss is incurred. However, to carry forward a loss, the income tax return must be filed within the due date.