Tips to save IPO listing gains tax!
In the years 2023 and 2024, many IPOs brought huge earnings for the investors. But tax also has to be paid on this! What is the tax rule on booking listing gains from IPO? How can tax liability on listing gains be reduced? How will the tax be calculated on selling IPO shares?
As a taxpayer, you would be familiar with the word tax deducted at source (TDS), as it is a sum deducted from your income such as salary, rent, interest from the bank account, and so on. However, in certain scenarios, your TDS collected is more than what you owe the government. In such a scenario, you can avail of a TDS refund. Let’s understand the steps on how you can claim excess TDS refund.
-As a taxpayer, at the time of filing an income tax return (ITR), you can ask for a refund when the tax deducted does not match with your actual tax payable.
-While filling for ITR, you will be asked to provide your bank name and IFSC code, which will make it simpler for the IT department to grant you the refund of the excess tax paid.
-In case of absence of taxable income, you have the option to opt for a low or NIL TDS certificate from your income tax officer under Form 13 as per section 197. You can submit this to your TDS deductor.
Steps to collect your TDS refund on fixed deposit
-Even after submitting the form 15G declaration, if your bank deducts tax on your interest income, you can ask for a refund by filling your ITR.
-However, in the absence of the taxable income, you need to submit a declaration in Form 15G before the end of the fiscal year to your bank to inform that you don’t have a taxable income, and hence there should be no TDS on your interest income.
Steps to take if you are 60 or above and hold a fixed deposit
-If you are 60 and above and hold a fixed deposit account, you are already exempted from tax deductions on fixed deposit interest earned up to Rs 50,000 annually. In the absence of the taxable income for a fiscal year, you need to submit Form 15H, notifying the bank that you don’t have any taxable income.
-Despite notifying you, if the bank still deducts the tax, you can claim a refund by filling ITR.
Here is how you can claim TDS online
-First, you need to register yourself on the Income-tax department web portal: https://incometaxindiaefiling.gov.in/.
-Post-registration, you need to file your income tax return by downloading the ITR form.
-Complete the required information, upload the form, and click submit.
-After submitting the ITR, an acknowledgement of receipt is generated, which you must e-verify. E-verification can be accomplished by the use of a digital signature, an Aadhaar-based one-time password, or your net banking account.
-If you cannot e-verify the ITR, you can still complete the verification process by providing a signed physical copy to the IT department.