LTCG,STCG

Save Share

This query is : Resolved

RUPESH R.H. (Querist)

26 June 2010 Sir,
Let me know what is tax rate on sale of Shares for A.Y.2010-11 and A.Y.2011-12.
pls tell me how to calculate tax on LTCG and STCG for BTST and derivative.
since, let me know can i take set off of STT on F & O derivative trading.
how to calculate this

Thanks
RUPESH

Aditya Maheshwari

Aditya Maheshwari (Expert)

26 June 2010 Tax rates for A. Y. 2010 - 11 & A. Y. 2011 - 12

LTCG - Nil if sale through a recognised exchange in India

STCG - 15.45% (including EC)

F & O trading - at normal slab rates

STT allowable deduction from F & O income.

Aditya Maheshwari

Aditya Maheshwari (Expert)

26 June 2010 In case of BTST transactions the ITO may consider your trading as business income and the income earned by the same may be assessed as income from business than as capital gains.

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)

26 June 2010 AGREED WITH ADITYA JI.

REGARDING STT :

The income from share transaction can occur in following forms
1. Share trading
2. Speculative trade
3. F & O transactions
4. Capital Gains
Allowance of STT for First three types (1, 2 & 3)
From Assessment Year Asst Year 2009-10 (FY 2008-09 ) , Securities Transaction Tax (STT) is defined as an expense u/s 36(xv) of the I T Act

(xv) an amount equal to the securities transaction tax paid by the assessee in respect of the taxable securities transactions entered into in the course of his business during the previous year, if the income arising from such taxable securities transactions is included in the income computed under the head Profits and gains of business or profession.
Therefore , for share trading income, or speculative income, or Futures & Options trades , STT is an expense and deductible.
Can You Deduct STT from Capital Gains?
However , if you are selling the shares as investments , the STT can not be deducted as cost of acquisition . This is provided under the proviso to section 48 which is regarding cost of acquisition
Proviso to section 48
Provided also that no deduction shall be allowed in computing the income chargeable under the head Capital gains in respect of any sum paid on account of securities transaction tax under Chapter VII of the Finance (No. 2) Act, 2004
Thumb rule is that STT is cost for all kinds of transactions except capital gains

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now