How to Calculate Your Tax Liability on Capital Gains – both long-term and short-term gains

The Income Tax Act provides for a specific way for adjustment of losses arising from sale/transfer of capital assets. But to start with the  process for set off, one has to first separate the capital losses into short term and long term.

Modus Operandi of Income Tax Scrutiny The main objective of the IT officer during scrutiny is to make sure that the income shown in the return is real and there is no tax evasion.

It seems that the government is all set to make Income Tax more complex and wipe away transparency from it. Taxpayers have not even recovered from the filing of cumbersome new ITR forms that it is reported by IT department to keep the scrutiny selection process away from the purview of RTI Act.

The CBDT has recently issued a circular specifying instructions and clarifications on furnishing of returns in the new ITR forms: It is mandatory for the proprietory and partnership firms, which are tax auditable u/s 44AB and companies (other than claiming exemption u/s 11) to electronically furnish the return of income/fringe benefits.  The return of income/ fringe benefits in Form ITR-7 by charitable/ religious trusts, political parties and other non-profit organisations is to be furnished in the paper form only.