Taxable Event

A taxable event refers to any occurrence that, under the law, gives rise to a tax obligation. Once such an event takes place, the taxpayer is legally responsible for paying the applicable tax.

Each type of tax is linked to its own triggering event—

for example: Income tax becomes relevant when income is earned.

GST applies when goods or services are supplied.

Capital gains tax arises when a capital asset is disposed of for a profit.

Gift-related tax rules may apply when a person receives a gift above the prescribed threshold.

Stamp duty is triggered when certain legal documents are executed.

Property tax is connected to owning or using property.

After the triggering event occurs, the liability exists even if the payment is made later.

Example: If you buy shares for ₹50,000 and later sell them for ₹80,000, the sale itself is the taxable event. It results in a gain of ₹30,000, which, subject to applicable rules, becomes liable to capital gains tax.