If my deposit interest income and short-term capital gains in FY24 add up to about ₹6 lakh, do I still need to pay STCG tax and file returns?
Based on the limited facts, I understand that your only source of income is interest from Savings and Fixed deposits and from Short Term Capital Gains, which adds up to ₹6 lakh.
As per Section 87A of the Income-tax Act, 1961, (‘the Act’), where the total income of a resident assessee is chargeable to tax under section 115BAC (i.e. new tax regime), and the total income does not exceed ₹7 lakh, a rebate of amount equal to 100 per cent of the tax or ₹25,000, whichever is less, is allowed from the tax payable. It is pertinent to note that the option to go in for new tax regime is allowed only while filing of original tax return i.e. prior to July 31t. In your case, you would need to file ITR-2.
Thus, on the assumption that you shall qualify as a Resident of India during the financial year 2023-24, in case your income from such sources does not exceed ₹7 lakh and you opt for the new tax regime (₹5 lakh in case of old tax regime), a rebate shall be allowed from the total tax payable as mentioned above.
You may note that in case the capital gains are covered under Section 112A i.e. Long-Term Capital Gain in case of sale of listed equity shares/mutual funds, the said rebate shall not be allowed.
The author is a practising chartered accountant
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