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Is there any Error in Itr2 utlity for AY1617

Rakesh (Proprietor) (70 Points)

12 June 2016

Gender - F , Salary- 3L , CG - 51711, OS-Interest income -4321, 80C - 150000 - What should be tax payable ? Incometax website IT calculator says Nil , ITR2 utility says need to pay 15% on CG - 7757 + Cess. Who is correct? Help needed

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CA Harshal Totla (Chartered Accountant) (2229 Points)
Replied 12 June 2016

Where the total income of an assessee includes any income chargeable under the head "Capital gains", arising from the transfer of a short-term capital asset,
being an equity share in a company or a unit of an equity oriented fund(STT paid), such C.G shall be taxable @ 15%
Where the gross total income of an assessee includes any short-term capital gains referred above, the deduction under Chapter VI-A shall be allowed from the gross total income as reduced by such capital gains.
So Mr.Rakesh, if the c.g as referred by you is on listed equity shares or units of equity oriented mutual fund or units of business trust, then capital gains shall be taxable @ 15% as calculated by itr utility. However, if such capital gain is on other short term capital asset then tax shall be NIL.

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Rakesh (Proprietor) (70 Points)
Replied 12 June 2016

Yes CG is from listed shares and STT paid but net income will be less than taxable income. So as per me calculation is as follows:

Salary 300,000

Interest 4321

STCG 51711

TotaI 356032

Less 150000 80C

TI 206032 which is less than 250,000 and so NIL tax payable.

Isn't above correct?

Thanks in advance

CA Harshal Totla (Chartered Accountant) (2229 Points)
Replied 12 June 2016

No sir,
it will be as follows:

STCG: 51711
tax thereon @ 15%: 7757+cess
Balance income: 304321
chapter vi-a deductions: 150000
balance income: 154321
tax thereon: nil (as it is below maximum amount not chargeable to tax).

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Rakesh (Proprietor) (70 Points)
Replied 12 June 2016

That means person with no salary no business and ZERO INCOME will have to pay tax if he has STT paid STCG even though his taxable income is NIL. Is this new or it has always been like this ?

CA Harshal Totla (Chartered Accountant) (2229 Points)
Replied 12 June 2016

where the total income as reduced by such short-term capital gains is below the maximum amount which is not chargeable to income-tax, then, such short-term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such short-term capital gains shall be computed at the rate of 15%.

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