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SECURITIES TRANSACTION TAX

sristi srivastava (COST ACCOUNTANT) (113 Points)

05 July 2010

Hi friends,

i want 2 ask whether STT is deductible as transfer expense in case of Capital Gains of shares & mutual funds.

and is it correct 2 show the sale value less of STT.

Thanks

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4 Replies

Siddarth R Sunder Ram (Finance Professional) (230 Points)
Replied 05 July 2010

While calculating taxable capital gains, STT is not allowed as a deduction from the sale consideration. Only expenditure on transfer such as brokerage, fees etc. are deductible from sale consideration to arrive at net consideration.

However in case the shares are sold as part of business activity, a deduction can be claimed under sec 36(1)(xiv) while calculating income under the head Business or Profession.

roopa (b.com) (364 Points)
Replied 05 July 2010

agree vth siddarth

janak (post graduation) (1327 Points)
Replied 05 July 2010

Originally posted by : Siddarth R Sunder Ram
	While calculating taxable capital gains, STT is not allowed as a deduction from the sale consideration. Only expenditure on transfer such as brokerage, fees etc. are deductible from sale consideration to arrive at net consideration. However in case the shares are sold as part of business activity, a deduction can be claimed under sec 36(1)(xiv) while calculating income under the head Business or Profession.