Budget 2025: Income above ₹12 Lakhs? | Capital Gains | Taxation on Cryptos | CA Rachana Ranade

Summary

The video delves into key FAQs regarding India's Budget 2025, with a focus on taxation. It explains how marginal relief works for incomes slightly exceeding 12 lakh, capital gains taxation on equity and crypto, and changes in house property taxation. The speaker clarifies common misconceptions and highlights new provisions, such as the ability to declare two self-occupied houses, which was introduced in the latest budget. The video is informative, especially for those with income from multiple sources or assets, helping viewers better understand tax implications and strategies.

Takeaways

• 😀 If your income exceeds ₹12 Lakhs, marginal relief applies to ensure you only pay tax on the additional income, not the entire excess.
• 😀 Short-Term Capital Gains (STCG) from the sale of listed equity shares are taxed at 20%, but you may pay no tax on gains up to ₹4 Lakhs if your other income falls within this limit.
• 😀 Long-Term Capital Gains (LTCG) are taxed at 12.5%, with no tax on the first ₹1,25,000 of gains from listed equity shares.
• 😀 Cryptocurrency (Virtual Digital Assets) is taxed at a flat rate of 30%, and losses from crypto cannot offset the gains, meaning taxes are calculated on the full gain amount.
• 😀 If your taxable income is marginally above ₹12 Lakhs, you only need to pay taxes on the excess income rather than the full amount, thanks to marginal relief.
• 😀 The tax exemption for capital gains on listed equity shares applies only to regular income under the tax slabs, not the special rates.
• 😀 From the 2025 budget, individuals with two self-occupied houses can claim both as self-occupied for tax purposes, providing relief from paying tax on those properties.
• 😀 Virtual Digital Assets like cryptocurrencies are taxed separately from regular income, with a flat 30% tax rate on profits, regardless of other exemptions.
• 😀 The new budget changes include no change in the taxation of capital gains or virtual digital assets from previous years, despite some public confusion.
• 😀 For individuals with house properties, they can now claim two houses as self-occupied and avoid tax on income from these properties if neither is rented out.
• 😀 The new provisions for two self-occupied house properties apply from the current financial year (FY 2024-2025) and offer significant relief to homeowners.

Q & A

What happens if my income marginally exceeds 12 lakh rupees?

If your income exceeds 12 lakh rupees by a small amount, the additional income is taxed at a higher rate, but you won't pay tax on the entire income above 12 lakh. The government provides marginal relief, so you'll only pay tax on the extra income.

How does marginal relief work when my income exceeds 12 lakh rupees by a small margin?

Marginal relief ensures that if your tax liability exceeds the income earned above the 12 lakh threshold, you only pay tax on the extra amount earned, not the entire increased income.

How are short-term capital gains from equity shares taxed?

Short-term capital gains from equity shares are taxed at 20%. However, if your taxable gain falls within the basic exemption limit (up to 4 lakh rupees), no tax is payable.

What is the tax treatment for long-term capital gains on equity shares?

Long-term capital gains from listed equity shares are taxed at 12.5%. Additionally, the first 1.25 lakh rupees of long-term capital gains are tax-free.

Does the 12 lakh basic exemption limit apply to capital gains on equity shares?

No, the 12 lakh basic exemption limit does not apply to capital gains on equity shares. This limit only applies to regular income and not capital gains taxed under special rates.

How are capital gains from virtual digital assets (VDAs) like crypto taxed?

Capital gains from virtual digital assets, including cryptocurrencies, are taxed at a flat rate of 30%. Losses from crypto sales cannot be set off against other gains, so you are taxed on the full gain amount.

Can losses from crypto be offset against other income for tax purposes?

No, losses from the sale of virtual digital assets (crypto) cannot be set off against other types of income. Tax is charged on the full gain, even if you have losses in other areas.

Is there a change in how income from house properties is taxed?

Yes, Budget 2025 introduced a change allowing individuals to declare two self-occupied house properties without incurring tax on them. However, if you have more than two properties, only two can be declared as self-occupied.

What happens if I have more than two house properties?

If you have more than two house properties, only two can be declared as self-occupied. For any additional properties, you will have to pay tax on the rental income or deemed rental value.

How are two self-occupied house properties treated for tax purposes under Budget 2025?

Under Budget 2025, you can declare two self-occupied houses as non-taxable, assuming they are not rented out. This provision is applicable from the current financial year.