proviso to section 112

This query is : Resolved

akshay (Querist)
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21 September 2010 it states that where the tax payable in respect of any income arising from the transfer of listed securities or units or zero coupon bonds,being long term capital assets,exceed 10%(ten percent)of the amount of capital gains before indexation ,then such excess shall be ignored while computing the tax payable by assessee.

is my tax treatment in following example is right???
net sale consideration=20,00,000
cost of acquistion =1,00,000
indexed cost of acquisition = 5,00,000

TAX TREATMENT
nsc = 20,00,000
LESS~coi = 1,00,000
capital gain = 19,00,000

now,
nsc = 20,00,000
LESS~ Icoi = 5,00,000
taxable cg = 15,00,000
tax payable @20percent = 3,00,000

but as per proviso to sec112
tax payable is 1,90,000
(ignoring excess of 1,90,000 i.e.10 percent of amt of capital gains before indexation)

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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21 September 2010 The proviso says excess over tax calculated @ 10% shall be ignored. That menas ,in the given situation, tax payable is Rs. 1,90,000/-

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