Can I claim deduction u/s 80C to 80U even for Long term/Short Term capital gain, when my income comprises of Salary, Other income and long term capital gain?

No, if the Gross total income of an Assessee includes any income arising from the transfer of Capital asset then, the Gross total income shall be reduced by the amount of such income.

The deduction under section 80C to 80U shall be allowed after reducing Long term/short term capital gain from Gross total income.

Example :

If my investments under section 80C is Rs.1,42,000/- and my gross total income comprises of the following-

  1. Salary of Rs.10,00,000/-
  2. Income from other sources 42,000/-
  3. Long term capital gain of Rs.5,00,00/-

What will be my Taxable income and Tax rates applicable?

Particulars Amount
Gross total income 15,42,000
Less: Long term capital gain 5,00,000
Gross total income(excluding LTCG) 10,42,000
Less: Deductions under Section 80C to 80U 1,42,000
Total Income (excluding LTCG) 9,00,000

Taxability

  1. LTCG will be charged at 20% under section 112A
  2. Total Income excluding LTCG will be charged at normal Tax rates

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