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Cost of improvement for calculation of short term capital gains in respect of shares

Hemant D (na) (304 Points)

25 February 2017

In one of the provisos of S. 48, STT has been specifically excluded for the purpose of calculation of capital gains. However, STT becomes a cost to the investor, and S. 55 does not make any specific exclusion. Can S.55 override proviso to s. 48 w.r.t. STT.

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Prateek (Student) (97 Points)
Replied 25 February 2017

As per Fifth Proviso to Sec.48 STT is not allowed as deduction while computing the income under the head "Capital Gains" and Sec.55 cannot override Sec.48 unless it is specifically mentioned.
However if the said shares are held as Stock in trade by the assessee then STT paid can be claimed as an expense under Section 36(1)(xv)