Financial Gym

Introduction Share trading is a popular investment option in India, with millions of people participating in the stock market. Share traders can make profits by buying and selling shares at a higher price than they bought them. However, share traders also need to be aware of the tax implications of their trading activity. Table of Contents: Introduction Capital gains Profit and gains of business or profession How to reduce tax liability Conclusion In India, share trading profits are taxed under two heads: Capital gains tax (CG) : CG is levied on the profits from the sale of shares held for more than one year. Profit and gains of business or profession (PGBP) : PGBP is levied on the profits from the sale of shares held for less than one year, as well as on the profits from intraday trading and F&O trading. Capital gains CG is calculate...

    The term “CTC” is kind of misleading. But, it clings on based on a technicality. “Cost-to-company” is technically correct, since it’s the cost companies incur on an employee. But, why should an employee care about the cost to the company? He only cares about what he gets. And what he gets is very different from the cost incurred by the company. But, in the long run, he gets almost what was promised. In this post, we are going to discuss some of the common CTC components, their benefits to employees, and their taxability. Table of Contents CTC Components table Leave Travel Allowance Other Allowances and Services Provident Fund Gratuity CTC Components table Sl. No. Particulars Received in Cash / Benefit availed in future Taxability 1 Basic Salary Cash Fully taxable ...

“Can I claim HRA if I am living with my parents?” is one of the most frequent questions that I get. In this post, I’m going to clarify that along with many other doubts you may have had or will have. I will tell you how to save as much tax as possible. All the things here will, of course, be legal ways to save tax. Table of Contents What is HRA? How HRA is taxed How much of HRA can be claimed as an exemption? Can I claim the exemption if I’m living with my parents? Is it possible to claim both HRA exemption and housing loan interest and principal deduction? Why is my employer asking for the landlord’s PAN? Can I claim just rent paid as a deduction? What is HRA? HRA or House Rent Allowance is a part of the salary provided by employers in order to help their employees in regard to their rent payments. Normally your CTC consists of different components like:     1. Basic salary. ...

  In my last post, I talked about investments that you can make in order to avail deduction from your income. These investments can be made by all individuals regardless of their nature of income. The deductions are covered under Chapter VI of the Income Tax Act. Among those, we will be specifically talking about section 80C and its subsections. Table of Contents When should I invest? Investment proof for IT Return List of eligible investments Limit on deduction availability Conclusion When should I invest? Let me first explain the concept of Financial Year and Assessment Year. In Income Tax, you come across the term “Assessment Year” more than “Financial Year”. A Financial Year (or Previous Year) that starts in April and ends in March, is the one in which you have actually earned money or incurred expenses. The current financial year is 2022-23. An Assessment Year is the one i...