Bengaluru: With an aim to help taxpayers make sense of the change in regime and how they can manage their equity holdings; ClearTax on Wednesday announced the launch of CA-assisted advisory and tax filing services.
The services are specifically for those taxpayers who have long-term gains and plan to harvest some in the current financial year.
Some taxpayers may benefit from tax gain harvesting until March 31, while others may have to choose a different strategy.
“We want to help taxpayers understand and prepare for the change in law smoothly. By using this service taxpayers will have access to expert advisory on their long term holdings. They can take suitable decisions about their equity holdings based on the new tax regime,” said founder and CEO, ClearTax, Archit Gupta.
Capital gains under the income tax laws, refers to any profit or gain that arises from the sale of a ‘capital asset’ which has to be offered to tax in the year in which the assets get transferred and the capital gains arises.
The Long Term Capital Gains (LTCG) Taxation Advisory Plan will help investors understand tax laws on long term capital gains.
In addition to the advisory plan, ClearTax has also launched LTCG filing services for those investors who have earned long-term capital gains. The plan offers assistance at each step of the tax ladder, along with expert advisory for tax planning.
Until the announcement of Budget 2018, the LTCG on sale of equity shares or units of an equity oriented fund or of a business trust, were exempt under Section 10(38).
Budget 2018, had proposed lifting of Sec 10(38) with a parallel introduction of Section 112A to tax LTCG on sale of equity shares or units of an equity oriented fund or of a business trust made after 1 April 2018, at a concessional rate of 10 percent on the gains in excess of Rs. 1 lakh without providing the benefits of indexation.
The proposal also said that investments made prior to January 31, 2018 would be grandfathered which means any gains having accrued to an investment until January 31, 2018 which are sold after April 1, 2018 would be exempt from tax.
To facilitate this, a method of determining the Cost of Acquisition (COA) of such investments has been specifically prescribed in the Finance Bill 2018, using which taxpayers are protected from paying tax on gains made till January 31, 2018.