Income from sale of shares

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This discussion clarifies the income tax liability for an individual receiving an annual pension and long-term capital gains from share sales. The calculation considers deductions, tax rates on capital gains, and the rebate available under Section 87A, potentially resulting in a minimal tax payable. There's also a note about considering the assessee's age and the specific taxability of long-term capital gains under Section 112A.

Gopalakrishnan V

Gopalakrishnan V (Querist)

16 December 2021 Mr Arjun is getting annual pension of Rs.4,00,000. In addition to this he has long term capital gains from sale of shares Rs.50,000. Kindly clarify his Income Tax liability.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

16 December 2021 Considering the rebate u/s. 87a of IT act, net tax liability will be NIL.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

16 December 2021 IT on salary 3,50,000 after 16(ia) deduction Rs. 5000/-
Tax @ 20% on capital gains Rs.50,000 Rs. 10,000/-
Total tax Rs. 15,000/-
Less: rebate U/s 87A Rs. 12,500/-
Balance Rs. 2,500/-
Add:- H.E. cess @ 4% Rs. 100/-
Tax payable Rs.2,600/-

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

16 December 2021 1. Yes Sir, agree with your detailed calculation for the assessee below sixty years of age.
2. The question seems from any text book (viva or 2 mark), where the age of the assessee is also required to be presumed based on receiving "Annual Pension" .........
3. Whether LTCG will be taxable or exempt (u/s. 112A) is more doubtful........

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