Tax planning
Listed shares and equity mutual fund gains, Sec 196 and 198 (old 111A and 112A; ₹1.25 lakh exemption, 31 January 2018 grandfathering)
What this means, checked by a CA
When you sell listed shares or equity mutual funds, short-term gains are taxed at 20% and long-term gains above ₹1.25 lakh at 12.5% (for sales from 23 July 2024). We pull your broker and mutual fund statements, apply the 31 January 2018 cost rule for old holdings, and fill Schedule CG and Schedule 112A so the return matches your AIS.
₹1,999
a year, + 18% GST
- Delivered in 2 working days after all broker and CAS statements
- Due: With the ITR: AY 2026-27 due date 31 July 2026 for ITR-2 (non-audit). Advance tax due in the quarter of sale to avoid Sec 425 (old 234C) interest.
How we do it: IDFD
Every case runs through the same four steps: Information, Discussion, Forms, Deliverables. You see each one ticked as it happens.
InformationWhat we need from you · 7 items
Broker tax P&L, all brokers
Trade-wise gains and holding period
CAMS or KFintech capital gains statement
Mutual fund redemptions and switches
AIS and TIS download
Sales reported by depositories
Purchase proof for pre-2018 shares
Actual cost for grandfathering test
Off-market transfer and gift detailsOptional
Broker report misses buy price
Brought forward capital loss detailsOptional
Set off before tax
Advance tax challans paidOptional
Credit and Sec 425 (old 234C) check
DiscussionWhat we discuss · 6 items
Did you trade intraday or in F&O as well as selling delivery holdings?
Intraday and F&O are business income, needs ITR-3 (see CGN-TRD-01)
Were any of the shares or units bought on or before 31 January 2018?
Grandfathered cost and scrip-wise Schedule 112A
Did any sale happen between 1 April and 22 July 2024 (for revised or belated FY 2024-25 work)?
Old rates 15% and 10% apply to those sales
Did you receive shares by gift, inheritance, bonus, merger, buyback or off-market transfer?
Cost and holding come from special rules, broker data may be wrong
Is your income other than these gains below the basic exemption limit, and are you resident?
Shortfall can absorb Sec 196 or 198 (old 111A or 112A) gains
Are you a resident, NRI or FPI?
NRIs face TDS; FPIs use Schedule 115AD
FormsForms we file · 8 items
Download tax P&L from each broker and the consolidated MF capital gains statement; reconcile with AIS sale entries
Where: Broker back office (for example console.zerodha.com/reports/taxpnl) and https://www.incometax.gov.in (AIS). Due: Before advance tax date of the quarter of sale, and before filing
Classify each sale: short term (12 months or less) or long term; and by date, before or after 23 July 2024
Holding = sale date minus purchase date; over 12 months is long term
Where: Internal working. Due: Before filing
Compute cost for pre-1 February 2018 holdings
Cost = higher of (actual cost) and (lower of FMV on 31 Jan 2018 and sale price)
Where: Internal working with exchange price on 31 January 2018. Due: Before filing
Compute tax
STCG (Sec 196, old Sec 111A) x 20%; LTCG (Sec 198, old Sec 112A) above ₹1,25,000 x 12.5% (10% for sales before 23 July 2024), plus surcharge and 4% cess; set off losses first (short-term loss against any gain, long-term loss only against long-term gain)
Where: Internal working. Due: Before filing
Pay any balance as self-assessment tax (Challan ITNS 280, minor head 300)
Where: https://www.incometax.gov.in e-Pay Tax. Due: Before filing the return
Choose the form: ITR-1 or ITR-4 only if the only gain is Sec 198 (old Sec 112A) long-term up to ₹1,25,000 and no loss to carry forward; otherwise ITR-2 (ITR-3 if business income)
Where: https://www.incometax.gov.in. Due: Before filing
Fill Schedule 112A (scrip-wise for shares bought on or before 31 January 2018), Schedule CG for Sec 196 (old Sec 111A) gains and other rows, CYLA, BFLA and CFL if losses
Where: https://www.incometax.gov.in > e-File > Income Tax Returns. Due: AY 2026-27: 31 July 2026 (ITR-2, non-audit)
Submit and e-verify within 30 days
Where: https://www.incometax.gov.in. Due: Within 30 days of filing
DeliverablesWhat you get · 3 items
Capital gains working, trade-wise
When: Before filing
Filed ITR acknowledgement (ITR-V)
When: Same day as filing
Note of losses carried forward
When: With the acknowledgement
Questions people ask
My long-term gain is ₹1.1 lakh. Do I still report it?
Yes. It is tax free up to ₹1,25,000 but must be reported. ITR-1 now allows 112A gains up to ₹1,25,000 if you have no other capital gains or losses to carry forward.
Is STT deductible from my gain?
No. Brokerage, exchange fees, stamp duty and GST are deductible; STT is not.
Which FMV do I use for 31 January 2018?
The highest price quoted on the exchange that day, or on the last earlier trading day if it did not trade; NAV for mutual fund units.
Did the ₹1.25 lakh limit apply for the whole of FY 2024-25?
Yes. The limit applies to the total of 112A gains for the year, under both the 10% and 12.5% rates.
Does the new Income-tax Act 2025 change the rates from April 2026?
No change in rates: Sec 196 keeps 20% and Sec 198 keeps 12.5% above ₹1,25,000. Only the section numbers change.
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