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Tarun Suthar
ย โขย
The Institute of Chartered Accountants of Indiaย โขย 1y
You still have to pay taxes if your income is below 12Lakhs.๐ Letโs talk about a crucial detail in the recent Indian Union Budget that many people are overlooking. If youโre already aware, great! But if not, this is essential to knowโotherwise, you might be in for a surprise when filing your income tax for FY 2025-26. By now, youโve probably heard that income up to โน12 lakh is tax-free. But hold onโbefore you start celebrating, hereโs what no oneโs 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 โน12 lakh, you could still owe taxes if you have special rate incomeโlike long-term or short-term capital gains from equity shares or mutual funds. Example: Letโs say you earned โน10 lakh in total, which includes: โน2 lakh as Long-Term Capital Gain (LTCG) โน1 lakh as Short-Term Capital Gain (STCG) Hereโs the breakdown: โน7 lakh (total income excluding capital gains) โ No tax โน2 lakh LTCG from mutual funds/stocks: First โน1 lakh is exempt On the remaining โน1 lakh, you pay 12.5% tax = โน12,500 โน1 lakh STCG: Flat 20% tax = โน20,000 So, while you might think you owe zero tax, the reality is youโd pay โน32,500 in tax (before adding the 4% cess).
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