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If you invest in mutual funds, there's some good news! 🚨
SEBI has reportedly proposed a tax benefit that could help you avoid paying LTCG tax immediately when switching mutual funds.
Here's what it means for your investments 👇🧵
And that's not the only proposal.
SEBI has also reportedly recommended removing LTCG tax for foreign portfolio investors on eligible Indian investments.
Currently, eligible long-term equity gains of these investors are generally taxed at 12.5%.
If accepted, the proposal could provide significant tax relief to foreign investors.
But before you switch your mutual funds, remember:
🚨 Neither proposal is law yet.
These recommendations have reportedly been submitted ahead of the Union Budget.
The government will decide whether to accept them.
Until then, the existing capital gains tax rules continue to apply.
The ₹22,750 calculation assumes an equity mutual fund, the full ₹1.25 lakh annual LTCG exemption being available, and no surcharge.
Actual tax may differ. The proposed switching relief may defer tax rather than eliminate it permanently.
Breaking News 🚨
SEBI has reportedly proposed LTCG tax relief for investors who switch from one domestic mutual fund scheme to another.
Today, such a switch can trigger capital gains tax because the old fund is treated as sold first.
SEBI has also proposed LTCG relief for foreign investors.
₹2 CRORE salary = ₹66.47 LAKH income tax.
₹2 CRORE business sales = ₹0 income tax?!
Yes, this is possible under India's income tax laws.
But how can the difference be so huge?
Here's how 👇🧵
₹25 lakh salary and ₹2 crore business sales are NOT the same thing.
Salary is income.
Business sales are the total money received from selling goods or services, before accounting for expenses.
And not every business qualifies for presumptive taxation.
So this doesn't mean every business owner earning ₹2 crore pays zero tax.
A man claimed a ₹9.90 lakh tax deduction for donating to a political party.
Then he received an Income Tax notice questioning the donation.
The case eventually reached the ITAT, Mumbai.
Here's what happened 👇🧵
Based on the investigation, the tax officer rejected his ₹9.90 lakh deduction.
The man challenged the decision, but his first appeal was also rejected.
He then approached the ITAT, Mumbai.
So, what did the tribunal decide?
ITAT Mumbai upheld the rejection of the ₹9.90 lakh deduction.
The tribunal did not overturn the earlier decision in light of the findings about the bogus donation scheme.
The takeaway?
Simply transferring money through a bank does not automatically make a political donation genuine.
If you claim a deduction under Section 80GGC, the donation itself must be genuine.