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If I bought set of equities today and sell them next year amounting to a capital gains say 1.5 lakhs. 1 lakh is exempted from LTCG and 0.5 lakh is charged with 10% LTCG tax. If my income salary bracket is in 30% then effectively 0.5 lakh reduces to 0.45 because of LTCG and then to 0.315 lakh because of income tax. Could you please let me know if my calculation is correct?

Note: Please note that this question is specific to indian context

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  • I don't know the Indian system, but in the UK you either pay income tax (on certain things) or you pay capital gains (on other things) – you wouldn't pay both taxes on the same thing.
    – TripeHound
    Apr 12, 2018 at 7:27

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If my income salary bracket is in 30% then effectively 0.5 lakh reduces to 0.45 because of LTCG and then to 0.315 lakh because of income tax. Could you please let me know if my calculation is correct?

This is incorrect. Long term Capital gains are taxed at 10%. There is no additional tax on this.

Short term capital gains are added to your income and taxed as per your tax brackets.

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  • I heard that short term capital gains are taxed at 15%. When will this 15% deduction happen if Short term capital gains are added to income?
    – Vinay
    Apr 12, 2018 at 18:14
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There are different rate of taxation for some nature of income, LTCG is one of them. You only have to pay 10% on 0.50 Lac. No further, taxation on this because that .05 Lag is the tax as per different tax dukan of that income type. Fine your other income, e.g. salary of rent you'll continue paying as per your tax slab.

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