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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 September 2011 I am salaried person. Presently, I fill up income tax return (ITR)-1 form. Recently, I opened a demat account and was allotted some shares in an initial public offers (IPO). If I sell these shares and pay the securities transaction tax (STT). Will I have to pay short-term capital gain tax? Should I continue to fill ITR-1? Or should I use some other form? If I sell the shares and pay STT after one year, long-term capital gain tax has to be paid. Do I continue to file my return though ITR-1 form?

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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27 September 2011 ITR-1 is applicable to individuals with only salary and interest income. In case of salaried person, they must file ITR–1. But if a salaried person also has capital gain income, then, ITR–2 is to be filed. In ITR-2, short-term capital gain tax is to be shown under, ‘Capital gain' in the CG schedule.

If the assessee sells the shares and pay STT after a gap of one year, then long-term capital gain, which is exempted under Section 10(38) of the Income Tax Act, 1961, is to be shown under EI (exempt income) schedule.

Naveen Joshi

Naveen Joshi (Expert)
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27 September 2011 in case of STCG on shares, if the share are equity shares and stt has been paid then u will have to pay tax at special rate of fifteen percent

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