Announcement expected regarding tax exemption on earnings from stock market

Budget 2024-25 Expectation: Under the current income tax rules, there is no tax on income up to Rs. 5 lakh under the old tax system and Rs. 7 lakh under the new tax system. But on July 5, an update came on the Income Tax Return Utility, due to which no relief is being given now.

According to the report, many investors are not able to claim exemption under section 87 (A) while filing income tax returns on income from the stock market despite having an income of less than Rs 5 lakh. Therefore, they hope that Finance Minister Nirmala Sitharaman will give relief on this issue in the budget to be presented tomorrow.

Problem in claiming after new update

The Income Tax portal utility got a new update on July 5 and since then users cannot claim exemption under Section 87(A) of Income Tax in respect of short-term capital gains. Even if their annual income is within the tax exemption limit, they are still unable to claim it. Under Section 87(A), users are required to pay Rs. 25 thousand and get exemption up to Rs.

capital gains tax

Capital gains tax has to be paid on the earnings from the stock market. Which are of two types – short term capital gain tax and long term capital gain. Specifically, if users hold shares for less than 1 year then they have to pay short term capital gain tax. When the holding limit exceeds one year, he has to pay long term capital gain tax.

What is the new change?

Before July 5, when a taxpayer filed income tax return (ITR) under the new tax regime, his total taxable income included short-term capital gains. On a total income of Rs. 7 lakh, he was given exemption under section 87A. Also, no tax had to be paid. However, from July 5, the taxpayer is now getting the benefit of tax exemption only on his basic income and even if the income is less than Rs. 7 lakh, the income from short-term capital gain tax is not being included in it. In such a situation, he has to pay tax on other income apart from the basic income.

hope from budget

This time, the NDA government under the leadership of Narendra Modi will give some relief to the common man from the burden of taxes. In such a situation, there is a possibility that the government may increase the scope of tax exemption or rebate in the new tax system.