New income tax rules from 1st April 2022 for surcharge on LTCG. Details here

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New income tax rules: From 1st April 2022, new financial year has begun and income tax relief announced in Union Budget 2022 has become applicable now. So, it is important for a taxpayer to know the changes in income tax rules being implemented from 1st April 2022. Income tax rules for levying surcharge on LTCG (Long Term Capital Gain) tax is one of them. From 1st April 2022, 15 per cent surcharge on LTCG on sale of listed stocks or mutual funds has now been extended to LTCG tax on all assets. So, from FY23, 15 per cent surcharge cap has now become applicable on LTCG tax on real estate property, physical gold, debt funds, debentures, etc as well. 

According to tax and investment experts, this move to unlisted asset would reduce the income tax burden for investors in bonds, manufacturing, startups and other types of unlisted assets.

Speaking on the new income tax rules for surcharge on LTCG in FY23; Sujit Bangar, Founder at Taxbuddy.com said, “Presently, there is cap of 15 per cent on surcharge on long term capital gain on sale of listed equity or mutual funds. From 1st April, 2022, this cap will be extended to long term capital gain on all assets.”

Elaborating upon the benefit announced in Budget 2022; Kartik Jhaveri, Director — Wealth at Transcend Consultants said, “After the extension of this income tax benefit, surcharge on LTCG tax applicable on real estate properties, physical gold, debentures, debt funds, etc. where LTCG is applicable is now capped at 15 per cent. So, from this financial year, there won’t be more than 15 per cent surcharge on any of the assets where LTCG is levied. Earlier, it was applicable on listed equity sales and equity mutual funds.” Jhaveri went on to add that extension of this benefit would reduce the tax burden for investors in startups, manufacturing, bonds and other types of unlisted assets as well.

Finance Minister Nirmala Sitharaman had proposed this income tax relief to a taxpayer in Budget 2022 citing, “The long-term capital gains on listed equity shares, units etc. are liable to maximum surcharge of 15 per cent, while the other long term capital gains are subjected to a graded surcharge which goes up to 37 per cent. I propose to cap the surcharge on long term capital gains arising on transfer of any type of assets at 15 per cent.”

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