I am of the understanding that capital gains under 1L are tax free and those gains aren’t to be added to your taxable income. However, I met a friend this evening who informed me that her CA says that capital gains are always added to the taxable income and are not really tax free regardless of them being under 1L. If this is true, my friend is not getting the 6K rebate she was hoping to get since her taxable income now crosses the 5L barrier. Had the capital gains not been added to her taxable income, she would well under this 5L barrier.
Can anybody please confirm if this is indeed true?
Some additional context: The capital gains are from her ELSS investments which were sold in the last FY and amounted to about 50k over the sale of about 1.7L
If this is indeed true, I have a follow up question from an inversion POV - if capital gains indeed exceed 1L, will one then be taxed twice? i.e. The 10% LTCG tax as well as the slab based tax on taxable income (salary - dedications + capital gains)
