DTAA or Double Tax Avoidance Agreement, is a tax treaty between two or more countries. The main objective behind signing this treaty is to avoid taxing the same income twice. If a non-resident Indian is residing in another country and earning there, the tax applicable comes under the consideration of DTAA. While signing the agreement, both contracting states decide on the tax rates and jurisdictions for income arising from both nations. India has signed DTAAs with almost 100 countries. DTAAs are beneficial for NRIs and help resolve inconsistencies in tax collection from non-residents.

Assets like stocks, bonds, property, mutual fund units, property etc., are great investment options that generate capital gains when sold/redeemed. Thus, they are called capital assets, and the profits generated from their sale are liable for taxation under the head capital gains.So, if you are thinking of investing in such assets, it is important to know about capital gains tax, its types, and available exemptions. Keep reading for a deeper insights around the following:Recent Budget Updates on Capital GainsWhat is capital gains taxCapital gains Tax Rules for different asset classesTax exemptions on capital gainsConclusion  What is Capital Gains Tax?As mentioned above, when you gain profits from the sale of capital assets, there are tax implications. This is called capital gains tax. Now, based on the holding period of the assets, there can be two types of applicable capital gains tax:Short-term capital gains tax orLong-term capital gains taxShort-Term Capital Gains TaxWhen you sell your capital assets after holding them for a period of less than or equal to 24 months, it would be considered a short-term asset.

HRA full form stands for House Rent Allowance. HRA is often a part of the employee's CTC which can be used to avail tax benefits under Section 10(13A) of the Income Tax Act. Proper rent receipts and documentation are essential to claim this benefit. However, this deduction is available only under the old regime.HRA CalculationLeast of the following is exempt: Actual HRA received Rent paid minus 10% of basic pay50%  / 40% of basic pay (depending on whether metro or non-metro city)What is HRA?House Rent Allowance is a salary component paid by the company to help employees meet rental expenses. While HRA is taxable, a portion of it can be exempt under the old tax regime as per Section 10(13A) of the Income Tax Act.

Short-term capital gains or STCG arise when assets are transferred within 24 months (12 months for listed equity shares equity mutual funds). They are taxed at applicable income tax slab rates (20% for listed equity shares and equity mutual funds).Key HighlightsNo indexation benefits are available for STCG.Capital gain exemptions for STCG is limited.Except for NRIs, no TDS implications on short-term capital gains.What is Short-Term Capital Gains(STCG)?Classification of Capital Gains as short-term and long-term depends on the period of holding. Short-Term Capital Gain (STCG) refers to the profit earned from selling capital assets held for a period within 24 months (or 12 months for listed equity shares and equity-oriented mutual funds). Indexation benefits are not available on sort-term capital gains.Short-Term Capital Gains Tax RateThe short-term capital gain tax rate varies depending on the type of asset being sold. The tax rates applicable for different types of assets are as follows:Asset TypeShort-Term Capital Gains TaxationTax RateListed Equity Shares & Equity-Oriented Mutual FundsListed Equity Shares & Equity-Oriented Mutual FundsListed Equity Shares & Equity-Oriented Mutual FundsTaxed under Section 111A (if STT is paid)20%      Other Assets (e.g., Real Estate, Land, Unlisted Shares)Other Assets (e.g., Real Estate, Land, Unlisted Shares)Taxed at normal income tax slab rates applicable to the taxpayerSlab ratesWhat are Short-Term Capital Assets?Capital Assets are classified as short term or long term based on holding period.

The Annual Information Statement (AIS) is a summary your key financial transactions and income for the year. It includes details such as TDS deducted, interest earned on savings and fixed deposits, purchase and sale of shares or mutual funds, high-value transactions like property or vehicle purchases, and more.Key Highlights Covers TDS/TCS, interest, dividends, securities and mutual fund transactions, property/vehicle purchases, foreign remittances, and more.Provides both Reported Value (from reporting entities) and Modified Value (after taxpayer feedback).Taxpayers must report all income, even if it is not shown in the AIS, to avoid mismatches, penalties, and notices.What is the Annual Information Summary (AIS)?The Annual Information Statement (AIS) is a summary of a taxpayer's information as reported by various organizations from which taxpayers have received any benefit, whether in cash, kind or otherwise. While AIS serves as a helpful statement for reference when filing an income tax return (ITR), it is not an absolute or conclusive document. Despite information shown in the AIS, the taxpayers are still required to independently declare all sources of income.It is important to understand that AIS only provides a summary of financial information transactions and may not always reflect the complete or accurate information of a taxpayer's income or financial transactions. Therefore, even if certain income is not reflected in the AIS, the taxpayers are still legally obligated to report it in the ITR.Salient Features of AISIt includes new information – interest, dividend, securities transactions, mutual fund transactions, foreign remittance information, etc.Summary of AIS information in the form of Taxpayer Information Summary (TIS) for ease of filing return (All the information will be pre-filled in your return)Taxpayers will be able to submit online feedback on AIS’s information and download information in PDF, JSON, and CSV file formatsAIS Utility will enable taxpayers to view AIS and upload feedback in an offline mannerSteps for Annual Information Statement (AIS) DownloadStep 1: To download your Annual Information Statement (AIS), log in to the income tax e-filing portal. Go to ‘AIS’.Step 2: Click on the ‘Proceed’ button.Step 3: It will redirect you to the compliance portal. You can view Taxpayer Information Summary (TIS) and Annual Information Statement (AIS), next to the instructions on the AIS home page. Step 4: Now select the relevant financial year, and you can view the Taxpayer Information Summary (TIS) or the Annual Information Statement (AIS) by clicking the relevant tiles.Step 5: You can download the AIS and TIS by clicking on the AIS download icon in the respective tiles.

Section 54F exemption of the Income Tax Act helps taxpayers save long term capital gains tax on sale of assets like gold or shares. Investing the sale proceeds in a residential property allows you to claim an exemption up to Rs 10 crores.Key HighlightsOnly the proportion of sales proceeds invested in the new residential property can be claimed as an exemption.The new residential house should be situated in India.The exemption can be claimed even by non-residents.Eligibility to claim Exemption under Section 54FCapital Gain exemption under section 54F is subject to certain conditions, which are:Taxpayer should invest the net sales amount of the old asset in purchase of a new residential house.The new residential property must be:Purchased: either 1 year before or 2 years after the sale of asset or Constructed: within 3 years of sale of old assetTaxpayer should not own more than one residential house on the date of sale, other than the one bought for claiming exemption under this section.Taxpayer should not purchase any other house within 2 years or construct one within 3 years from the transfer date.If the above conditions are not satisfied, then exempt Capital Gains taxable in the year in which such other residential house is purchased/ constructed.Net Sale ConsiderationNet sale consideration means the sale value of property after reducing the transfer expenses like legal fees, commission, registration charges, etc.,How to Calculate Exemption u/s 54F?Exemption u/s 54F is available to the amount invested proportionate amount of sales consideration. It can be arrived using the formula below.54F Exemption = Capital Gains * Amount invested in residential property / Net Sale ConsiderationNote:When the amount invested in residential property exceeds Rs. 10 crore, the maximum amount taken for exemption calculation should be restricted to Rs. 10 crore.

Section 54 of the Income Tax Act provides exemptions from long-term capital gains tax, if you reinvest the capital gains in another residential property. You can either purchase another house within 2 years or construct one within 3 years from the date of sale. Exemption can be claimed up to Rs. 10 crore. This helps taxpayers save tax by reinvesting the sale proceeds in a new home, subject to conditions under the Act.Key HighlightsImportant criteria to claim exemption under :Section 54 Exemption can be claimed only on long term capital gain on sale of residential house property.Up to Rs.

The Capital Gain Accounts Scheme (CGAS) allows taxpayers to save tax on long-term capital gains by depositing the gains within the ITR due date in a special bank account until they buy a new property or asset.Latest UpdateAs per the latest notification by the department, private sector banks and small finance banks can accept deposits under this scheme. Deposits through UPI, BHIM, NEFT, RTGS, debit cards and credit cards are now accepted under Capital Gains Account Scheme.What is Capital Gains Account Scheme?The Capital Gains Account Scheme (CGAS) was introduced by the Central Government in 1988 to help taxpayers claim exemptions on long-term capital gains. Often, the time needed to reinvest capital gains exceeds the due date for filing income tax returns. In such cases, taxpayers can deposit the unutilised capital gains in a Capital Gains Account under CGAS to remain eligible for exemption.Investing the gains in this account is treated the same as direct reinvestment for exemption purposes. However, short-term capital gains are not eligible for the capital gains account scheme (CGAS), as exemptions under Sections 54 to 54GB apply only to long-term capital gains.Who Can Deposit in Capital Gains Account Scheme?Any taxpayer who earns long-term capital gains and wants to claim exemption under Sections 54 to 54GB can deposit in the Capital Gains Account Scheme (CGAS). This includes Individuals, Hindu Undivided Families (HUFs), Companies, Trusts, and any other person eligible for capital gains exemption.

ESOP (Employee stock option plan) offers employees equity shares of the company, on satisfaction of vesting conditions. They are treated as a part of salary for the purposes of taxation.Terms on ESOPs Before you understand the taxation of ESOPs and RSUs, here are some key terms you must know:ESOP – Employee Stock Option Plan, allows an employee to own equity shares of the employer company over a certain period. The terms are agreed upon between the employer and employee.ESPP - Employee Stock Purchase Plan allows an employee to own equity shares of the employer based on the agreed purchase price. Employees pay for such stock at a discounted price which is paid directly from their bank account or deducted on a monthly basis from the payroll or payslip.RSU - Restricted Stock Units are usually issued by those companies listed outside India. In the case of RSU, it is issued to employees as a reward when the employee achieves a milestone or target.

RSU stands for Restricted Stock Units. These are units of stocks (or shares) given to employees with vesting conditions. RSU's are given to employees free of cost, and treated as salary for taxation purposes when it is received.What is RSU?Restricted Stock Units (RSUs) are a restricted form of equity incentive that an employer grants to its employees. Since the employee in question gets them in the form of an incentive, they don't have to pay any money for it. It is provided to them on satisfaction of vesting conditions, usually over a vesting schedule. Vesting ConditionsVesting conditions are criteria fixed by the company, satisfaction of which the RSUs will be granted to the employee. It may be based on certain years of service, achievement of certain performance targets, or other restrictions. If these conditions are satisfied, the shares will be ‘vested’ on the employee, he or she will have ownership rights to sell the shares or exercise complete rights over the shares only on vesting of shares.Vesting ScheduleVesting schedule is usually the time frame set by the company, during which gradually the shares become vested to the employee.Let us new understand the working mechanism of RSUs with example.Example of Restricted Stock UnitLet’s say an employee Rishi is promised 3,000 company shares as RSU. As per the vesting schedule, he will receive 1,000 shares every year for 3 years once he completes 1 lakh sales and 1 year with his employer. In this case, the vesting conditions are: Completion of 1 year of service (and)Completion of 1 lakh salesOnce he meets both these conditions, he will start receiving the stocks as per the vesting schedule. In this case, the vesting schedule is as follows:Vesting ScheduleNumber of SharesAt the end of year 11,000At the end of year 21,000At the end of year 31,000To know how to calculate RSU value, always take the fair market value of the share into consideration. Taxation of RSU in IndiaThe tax implications occur at two events for RSUs in India.