I made a profit of Rs 73725.13 last year on selling equity shares after IPO allotment. This was around 9th July 2024. Since the equity shares were held for less than one year, the profit/gains would be classified as STCG on which no exemption is available, unlike LTCG.I sold these shares in early July when the STCG tax was 15%. From 23rd July, the STCG tax was revised to 20% but it is not applicable for me as I made profits before this date.
Do I need to pay this tax of Rs 11058.7695 (73725.13 * 0.15)? If yes, do I need to pay all this tax as an advance tax before March 31 2025?
I have not yet received any intimation from the IT department for any taxes to be paid.
The advance tax payment is based on the principle of ‘pay as you earn’.
Assuming that you are a salaried individual, your employer would have deducted tax at source (TDS) every month, only on your salary income.
Therefore when you earned a STCG in early July 2024, you should have paid the tax applicable on this STCG, on or before the next advance tax payment date, which is 15th Sept. 2024. (Pay as you earn principle)
Since, you have missed that deadline, interest will be payable. It is in your interest to pay the tax on STCG + interest from July24 to Mar25 now, rather than wait till filing of your Return, as the interest meter will keep ticking.
Yes, you are liable to pay Short-Term Capital Gains (STCG) tax of ₹11,058.77 (i.e., 15% of ₹73,725.13) on your equity share sale since the shares were held for less than one year.
Since your STCG occurred in July 2024, it falls under the FY 2024-25 (AY 2025-26). The Income Tax Department requires taxpayers to pay advance tax if their total tax liability exceeds ₹10,000 in a financial year.
Advance Tax Payment Schedule for FY 2024-25
If your total tax liability (including this STCG tax and any other taxable income) exceeds ₹10,000, you need to pay advance tax in the following manner:
15% by June 15, 2024 (Not applicable since you made a profit in July)
45% by September 15, 2024
75% by December 15, 2024
100% by March 15, 2025
So yes, if your total tax liability (including STCG tax and tax on any other income) exceeds ₹10,000, you must pay the tax in advance as per the schedule above.
Penalty for Non-Payment of Advance Tax
If you fail to pay advance tax, you may be charged interest under Sections 234B and 234C when filing your ITR. To avoid penalties, you should have paid advance tax before March 15, 2025 if your total liability exceeds ₹10,000.
The penalty should start from July when I realised the capital gains or from September when I first missed the cutoff date?
If I had paid by 15th March 2025, I would not have to pay the interest for missing the deadlines from the preceding months?
Should I pay Rs 12000 (which would include the penalty interest) by tomorrow and the extra amount shall be refunded during the filing of ITR? What is the extract amount I have to pay?
This is a calculation I have done:
The total tax on my realized captain gains of IPO sold shares, without interest on advance tax, for me on STCG made before July 23 2024 (when STCG was revised to 20%) at the rate of 15 % is Rs 11056.8195
No capital gains till 15th June 2024 so 0 advance tax
I made realized capital gains in early July so advance tax till be Q2 cuffoff date:
Rs 11056.8195 * 45 % - advance tax paid in Q1= Rs 4975.568775 - 0 = Rs 4975.568775
(No new realized capital gains till the end of this FY on 31st March 2025.)
Advance tax on Q3 cutoff date : calculated in similar manner
Advance tax on Q4 cutoff date: calculated in similar manner
By Q4 cutoff date, 100% advance tax should be paid.
Advance tax by 31st March 2025: last date including penalty.
I just tried this myself for CG calculations, it is sufficiently detailed. You can also separate out the gains in different tax rate (changes made in budget):
