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Tarun Suthar
•
The Institute of Chartered Accountants of India • 1m
You still have to pay taxes if your income is below 12Lakhs.💀 Let’s talk about a crucial detail in the recent Indian Union Budget that many people are overlooking. If you’re already aware, great! But if not, this is essential to know—otherwise, you might be in for a surprise when filing your income tax for FY 2025-26. By now, you’ve probably heard that income up to ₹12 lakh is tax-free. But hold on—before you start celebrating, here’s what no one’s mentioning: There are two types of Income - Normal income and Special Income. Tax on Normal Income is calculated on the basis of slab rate. and Tax on Special Incomes like STCG111, STCG111A, LTCG112 and LTCG112A are calculated on basis on Special rates. STCG111- 20% STCG111A- 20% LTCG112- 12.5% LTCG112A- 12.5% Lottery Income- 30% VDAs -30% Even if your total income is below ₹12 lakh, you could still owe taxes if you have special rate income—like long-term or short-term capital gains from equity shares or mutual funds. Example: Let’s say you earned ₹10 lakh in total, which includes: ₹2 lakh as Long-Term Capital Gain (LTCG) ₹1 lakh as Short-Term Capital Gain (STCG) Here’s the breakdown: ₹7 lakh (total income excluding capital gains) — No tax ₹2 lakh LTCG from mutual funds/stocks: First ₹1 lakh is exempt On the remaining ₹1 lakh, you pay 12.5% tax = ₹12,500 ₹1 lakh STCG: Flat 20% tax = ₹20,000 So, while you might think you owe zero tax, the reality is you’d pay ₹32,500 in tax (before adding the 4% cess).
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