Long Term capital Gains are those gains that arise from sale of capital assets such as stocks, mutual funds, gold, properties, etc. While listed equity shares and equity oriented funds qualify for long term after 12 months, other capital assets are classified as long term on holding it for more than 24 months. As per section 112 and 112A of the Income Tax Act, 1961, Long term capital gains are taxed at 12.5%, with ₹1.25 lakh exemption available only to section 112A securities. The following blog explains the holding period criteria, tax rates, grandfathering provisions, exemptions available on long term capital gains such as section 54, 54B, 54EC, 54F, etc.Key HighlightsParticularsDetailsLTCG Tax Rate12.50%Equity Exemption₹1.25 lakhProperty Holding Period24 monthsListed Shares Holding Period12 monthsIndexation Available?Only in specified property casesPopular ExemptionsSection 54, 54EC, 54FWhat is Long-term Capital Gain (LTCG)?Capital gains or profits arising from the transfer of Long-Term Capital Assets is referred to as Long-Term Capital Gains or LTCG. An asset held for more than 24 months is termed as a long term capital asset.For listed equity shares, equity oriented funds, and units of business trust, the holding period is 12 months. (if held for more than 12 months, they are considered long term capital assets)Long-term Capital Gain (LTCG) Tax Rate The following tax rates are applicable to long-term capital gains:Asset TypeHolding period (LTCA if held for more than the specified period)Tax RateListed Equity Shares12 months12.50%**Equity Mutual Funds12 months12.50%**Property (land/building)*24 months12.50%Gold / Gold ETF24 months12.50%Debt Mutual Funds (post Apr 2023)Any holding periodAs per slab* - 20% tax rate with indexation benefits available for resident individuals and HUFs whose assets were purchased before 23rd July 2024.**- Exemption up to Rs. 1.25 lakhs available for listed equity shares, equity oriented funds and units of business trust.Calculation of LTCG TaxTo calculate the long-term capital gains accurately, follow the steps mentioned below:1.

Section 26 of the Income Tax Act 1961 enables each co-owner to fully exhaust their deduction limits under house property income. Every deduction available under the head house property can be claimed by both co-owners separately. Using this provision, a couple can claim up to ₹4 lakhs interest deduction on self-occupied property, and ₹3 lakhs principal repayment under the old regime, when they are co-owners and co-borrowers.Conditions to Claim the Tax Benefit on the PropertyYou must be a co-owner of the property– To be able to claim tax benefits for a home loan, you must be an owner of the property. Many a time, a loan is taken jointly, but the borrower is not an owner as per the property documents. In such a case, you may not be able to claim tax benefits.You must be a co-borrower for the loan– Besides being an owner, you must also be an applicant as per the loan documents.

Section 54 of the Income Tax Act, allows taxpayers to claim an exemption from Long-term Capital Gains arising from sale of residential house property, when such gains are reinvested in another residential property. The taxpayer must purchase a new residential house within 2 years or construct a new house within 3 years from date of sale. However, the maximum allowed exemption limit is capped at Rs. 10 Crore. Overview of Section 54 ExemptionAspectDetailsWho can claimIndividuals and HUFs onlyCapital gains typeLong-term capital gains from sale of residential house propertyExemption limitRs. 10 CroreTax regimeAvailable under both old and new tax regimesWhat is Section 54?Section 54 provides an exemption from long-term capital gains tax when an individual sells a house and purchases another house using the capital gains.

When a resident taxpayer receives income from a foreign state, the tax will be deducted from the income of the foreign state and such taxpayer is liable for tax in the resident state. In such cases, residents can claim credit for the amount of tax deducted in the foreign state by filing Form 67 with the income tax department. Residents must submit Form 67 before the due date of Income Tax Returns (ITR) filing to claim credit for such taxes. Form 67 is also required to be furnished in case the carry backward of losses of the current year results in the refund of foreign tax for which credit has been claimed in any previous years.As per the provisions of the new Income Tax Rules 2026, Form 67 has been replaced by Form 44.What is Foreign Tax Credit (FTC)?Assume a scenario where a taxpayer is a tax resident of Country A (Residence State) and receives income from Country B (Source State). The Source State withholds a portion of taxes on the income received by the taxpayer in that country. Further, the Residence State, according to its tax laws, would tax the taxpayer on his worldwide income, which would include income from the Source State too.This would result in the taxpayer being taxed on his income twice, i.e.

Transport allowance is a benefit provided by employers to help employees manage their commuting expenses. It plays a crucial role in salary structure and taxation, with specific exemptions and rules that employees should be aware of. Key HighlightsFully taxable for most employees, but specially abled employees can claim an exemption up to Rs. 3,200 per month.Allowance rates depend on pay level and city class; DA is applicable; a double allowance is provided for specially abled individuals.Exemption available under the new regime for only specially abled employees What is Transport Allowance?Transport allowance could mean allowance provided for the purpose of transport from residence to the place of work. However, transport allowance under Section 10(14) of Income-tax Act,1961 read with rule 2BB of Income-tax rules can be either of the following:Allowance granted to an employee to meet his expenditure for the purpose of commuting between his place of residence and office/place of dutyTransport allowance is taxable in the hands of the employee since it is added to their gross salaries. However, employees who are blind, deaf, dumb or orthopedically handicapped it is allowed upto Rs.

The Annual Information Statement (AIS) is a summary of key financial transactions and income for the year. For FY 2025-26, 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. It includes new information – interest, dividend, securities transactions, mutual fund transactions, foreign remittance information, etc. for FY 2025-26.Summary of AIS information is 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.

Advance tax refers to the tax paid during the financial year, for the estimated total income for the year.  If the tax on total income after TDS exceeds 10,000 INR in a financial year, advance tax payment is mandatory. Advance tax can be paid online via Income Tax Portal, either through logging in, or without login using 'quick links' section.Advance Tax Due DateThe due date to pay the 1st installment of advance tax for Q1 FY 2026-27 (Apr-Jun) is June, 2026 Taxpayers should make sure to pay 15% of the total tax liability for the year by June 15, 2026. Taxpayers shall refer to section 403 to 410 of the Income Tax Act, 2025 with effect from 1st April 2026, not the 1961 Act.What is Advance Tax? (Meaning & Definition)Advance tax is income tax paid through multiple installments before the end of financial year, instead of a lump sum payment after the end of the financial year. The provisions related to advance tax are covered under section 403 to section 410 of the Income tax act, 2025.The taxpayer calculates the estimated total income at the beginning of the financial year, thereby estimating his tax liability. The advance tax payments have to be made in fixed percentage through four installments as per the due dates provided by the income tax department.Who should pay Advance Tax?As per section 404 of the Income tax act, any assessee whose estimated tax liability for the financial year exceeds Rs 10,000, he or she is required to pay advance tax. If TDS is already deducted against a person, and still Rs 10,000 tax is payable as per estimation, he /she also needs to pay advance tax.This provision applies to all taxpayers, salaried individuals, freelancers, and businesses.Note: Senior citizens - People aged 60 years or more who do not have income from any business or profession during the financial year are exempt from paying advance tax. However, senior citizens (60 years or more) having business or professional income must pay advance tax.How to Calculate Advance Tax?Here is a step by step guide to ascertain your advance tax liability and instalment amount.Consider your income earned for preceding financial years. Ascertain how much more or less you will earn as compared to preceding years.Consider all your eligible deductions and exemptions.Make an estimate of your total taxable income. Using our tax calculator, calculate the tax liability under the most beneficial tax regime for you. If your total tax liability exceeds Rs.10,000 for the financial year, you are required to pay advance tax.The below table will help you understand better.ParticularsAmountGross Total IncomeXXX(-) Deductions Under Chapter VIXXXNet Total IncomeXXXTax LiabilityXXX(+) SurchargeXXX(+) Health & Education CessXXXGross Tax LiabilityXXX(-) TDS/TCSXXXNet Tax LiabilityXXXAdvance Tax Rates and Due Dates For FY 2026-27 (Due Dates for All Instalments)The due date for advance tax payments for FY 2026-27 is given below:Regular Taxpayers InstalmentDue DateAdvance Tax Payment PercentageFirst InstalmentOn or before 15th June 202615% of tax liabilitySecond InstalmentOn or before 15th September 202645% of tax liability (-) advance tax already paidThird InstalmentOn or before 15th December 202675% of tax liability (-) advance tax already paidFourth InstalmentOn or before 15th March 2027100% of tax liability (-) advance tax already paidNote: No interest u/s 425 shall be levied if you have paid advance tax up to 12% in first instalment and up to 36% in second instalment.Taxpayers Opting Presumptive Taxation For freelancers, small business owners who have opted for Presumptive Taxation Scheme under sections 44AD & 44ADA – the advance tax due dates are as follows.Due DateAdvance Tax Payment PercentageOn or before 15th March 2027100% of advance tax**Taxpayers opting for presumptive taxation also have the option to pay all of their tax dues by 31st March.

Dearness Allowance (DA) is a salary component paid to employees of public sector undertakings to offset the impact of inflation and rising living costs. Calculated as a percentage of the basic salary, DA is revised twice a year based on the Consumer Price Index (CPI). It is fully taxable and varies depending on factors like basic pay and inflation rates.DA Raised by 2%The Dearness allowance has been increased to 60% from the existing limit of 58% for central government employees as approved by the Union Cabinet. This DA hike will take effect from 1st January, 2026. The purpose of DA hike is to offset the impact of inflation and rising living costs. The state governments of Tamil Nadu, Bihar, and Odisha have also raised the Dearness Allowance (DA) for their respective government employees and pensioners.What is Dearness Allowance?The government pays Dearness Allowance to its employees and pensioners as a cost of living adjustment to offset the impact of inflation.

An Income Tax Notice is an official communication from the Income Tax Department alerting a taxpayer to discrepancies, missing information, overdue filing, or unreported income. Notice can be issued to the taxpayer irrespective of whether returns are filed or not. It is important to understand the type of notice, primary issue involed, and the time limit for response to stay compliant and avoid adverse consequences.What is Income Tax Notice?An income tax notice is an official communication issued by the Income Tax Department to a taxpayer regarding discrepancies, non-compliance, or additional information required related to their Income Tax Return (ITR). Each notice is issued under a specific section of the Income Tax Act and requires timely action to avoid penalties or legal consequences. It may be sent for reasons such as:Non-filing of returns Mismatch in reported income Verification of claimsDemand for outstanding tax. Popular Notices issued under the Income Tax ActSection numberNoticeSection 142(1)Inquiry before assessmentSection 143(1)IntimationSection 143(2)Notice for scrutiny assessmentSection 148Income Escaping AssessmentSection 245Demand noticeHow to Verify or Authenticate Income Tax Notices?Before responding to any notice or order from the Income Tax Department, it is crucial to verify its authenticity. You can check whether the income tax notice is genuine by using the ‘Authenticate Notice/Order’ feature on the Income Tax e-filing portal.

Kisan Vikas Patra (KVP) is a government-backed savings scheme offered by India Post that allows investors to double their investment in 115 months (9 years and 5 months). It is a low-risk investment option designed to encourage long-term savings by offering guaranteed returns with annual compounding.Under the current rules, KVP offers an interest rate of 7.5% per annum, and the minimum investment starts from Rs.1,000 with no maximum limit. The scheme is suitable for conservative investors who want safe and predictable returns without exposure to market risks.Kisan Vikas Patra (KVP) - Key HighlightsGovernment-backed savings scheme that doubles your investment in 115 months (9 years 5 months).Current interest rate is 7.5% p.a., compounded annually (as per latest rates).Minimum investment is Rs.1,000 with no maximum limit on investment.Interest earned is taxable and no deduction is available under Section 80C.Available at post offices and selected banks with nomination and transfer facility.What is Kisan Vikas Patra?India Post introduced the Kisan Vikas Patra (KVP) as a small saving certificate scheme in 1988. The tenure for the scheme is now 115 months (9 years and 5 months).And if you invest a lump sum amount today, you can get double the amount at the end of the 115th month. Initially, it was meant for farmers to enable them to save for the long term, hence the name. Now it is available for all. The minimum investment amount is Rs.1,000, and there is no upper limit. To prevent the possibility of money laundering, the government in 2014 made PAN card proof compulsory for investments above Rs.50,000.