exemption

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krishna chaitanya (Querist)
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24 August 2010 respected members
1)Any income arising from long term capital asset, being an eligible equity share in the company purchased on or after 01/03/2003 and before 01/03/2004 provided such transefer takes place after holding the share for 12 months or more this income do not form part of total income.

my question is
what is the main reason for mentioning the specific period in the given statement?

2)any income arises to a skkemese individual from any sorce in the state of sikkim and by way of dividend or interest on securities do not form part of his total income.

what is the reason for exempting the income to an sikkim individual?

with regards
chaitanya

venkatraman shrinivas

venkatraman shrinivas (Expert)
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25 August 2010 The exemption is granted under section 10(38) of the Income-tax Act,of long term capital gains on transfer of securities, since shares acquired during the period should have suffered securities Transaction tax. In order not to burden such investors, the exemption is provided. Besides, both the buyer as also the seller pay tax on the whole value of the transaction. Subjecting such deals also to CGT, would amount to taxing the same source twice. It is to obviate such hardship that the exemption is provided.

As regards Sikkim, the Act provides for exemption under section 10(26AAA) of the Sikkim individuals of any income earned from that soil.(of-course Sikkimese women if they marry an outsider i.e.non Sikkim person, they are not covered by this exemption)) This is mainly due to provide some leverage for such individuals who have to endure utmost hardship due to inadequate civic facilities, besides geographical dislocation, being in the Himalayan foot hills when compared to the rest of the country and difficulty in navigating, get involved in some gainful earning.(deduced from the judicial back ground warranting the grant of exemption)

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