Securities transaction tax

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Neha Dhapola (Querist)
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19 January 2012 Kindly help me...
I want to know what is the treatment of STT in computation of Total Income of an individual? Whether is is shown in GTI and then deduction is made of it or it is already deducted from head Income from capital gain and hence not included in GTI???

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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19 January 2012 Treatment of STT depends upon the nature of the income.

If sale/purchase of shares, etc on which STT is paid are shown as Capital Gain, then STT is not allowed as deduction.

That means at the time of purchase, STT shall NOT be added to the cost of the asset, and

at the time of sale STT shall NOT be reduced from the sale price.

This position is as per Fifth Proviso to Section 48.

If the income is shown as business income, then STT paid is allowed as deduction u/s 36(xv).

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Neha Dhapola

Neha Dhapola (Querist)
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19 January 2012 Further i want to know if the deduction of STT is to be received under that particular head or lastly at the end from GTI

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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19 January 2012 Deduction is available only if the income is shown as BUSINESS INCOME.

Deduction shall be allowed while computing business income and NOT from GTI.

Earlier STT paid was allowed as rebate u/s 88E from GTI.

But now it is allowed as a deduction from business income.

Neha Dhapola

Neha Dhapola (Querist)
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19 January 2012 Thanks for giving answers of my queries...
Thanks a lot...

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Guest

Guest (Expert)

19 January 2012 Siddhartha ji you have explained exceptionally brilliantly.

Thanks so much.

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