ITR Form 3 Combined Salary & Capital Gains Tax Calculator 2026

Equity capital gains are subject to special statutory tax rates under Section 111A (20% for STCG) and Section 112A (12.5% for LTCG exceeding ₹1.25 Lakhs exemption), rather than your regular income tax slab rates.

No, Chapter VI-A deductions (80C, 80D, 80CCD) cannot be set off against special rate capital gains (STCG u/s 111A or LTCG u/s 112A). They can only reduce regular salary and business income.

Under Section 112A, the first ₹1,25,000 of long-term capital gains across equity shares and equity mutual funds in a financial year is completely tax-free. Only gains above this threshold are taxed at 12.5%.

No. Section 87A never reaches income taxed at a special rate, so STCG under Section 111A at 20% and LTCG under Section 112A at 12.5% stay outside it — this was made explicit by the Finance Act 2025. The ₹12,00,000 threshold is also tested on your normal income alone, excluding those gains. So a salaried person with ₹11,00,000 of normal taxable income and ₹3,00,000 of equity STCG still gets the rebate on the salary part, but pays the full 20% on the gains.

No. Equity STCG under Section 111A and LTCG under Section 112A are taxed at their own flat rates and are not stacked on top of salary for slab purposes, so booking a gain cannot move your salary from the 20% band to 30%. They do count towards total income for surcharge thresholds and for limits expressed as a percentage of total income. Gains on debt funds, gold and unlisted shares held short term are a different matter — those are taxed at slab rates.

Yes, and only a resident can do it. Under the provisos to Sections 111A and 112A, if your normal income falls short of the basic exemption limit, the shortfall may be adjusted against the special-rate gains before applying 20% or 12.5%. On the new regime the limit is ₹4,00,000, so a resident with ₹1,50,000 of normal income and ₹6,00,000 of equity STCG can absorb ₹2,50,000 of the gain first. Non-residents get no such adjustment.

ITR-2 is the right form for salary plus capital gains, including equity, mutual funds, property and foreign shares, as long as you have no business or professional income. If you also freelance or run a business, or are a partner in a firm, it moves to ITR-3. ITR-1 cannot be used once you have capital gains other than the limited LTCG relaxation, and filing the wrong form gets the return treated as defective under Section 139(9).