Short term capital gain from share

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This discussion clarifies the tax implications of short-term capital gains (STCG) from selling shares. Even if your total taxable income is below £5 lakh, you will likely still need to pay tax on STCG. The STCG is taxed at a specific rate, and the rebate under Section 87A may not cover the full amount if the gain is substantial. Treating STCG as business income is also discussed, with potential pros and cons outlined.

naresh

naresh (Querist)

24 April 2022 Sir
I have taxable income below 5 lakh but during the year have earned short term capital gain from sale of shares rs 200000
How to calculate income tax

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

24 April 2022 15% tax payable on 200000 short term capital gains.

naresh

naresh (Querist)

26 April 2022 Thanks for reply sir
But by taxable income is below 5 lakh. Am i still need to pay tax. Can i treat this short term capital gain as business income and need not required to pay tax as i am below taxable limit
If yes then what are pros and cons of treating short term capital gain as business income

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

26 April 2022 Yes, tax audit applicable if turnover exceed one crore. Higher tax applicable in case of higher profits.

CA Puja Sharma

CA Puja Sharma (Expert)

26 April 2022 When the total income of an individual or HUF is upto Rs. 5,00,000 then he claim rebate u/s 87Q upto Rs. 12,500.
In your case, since your STCG is Rs. 2,00,000, a higher tax rate will apply in your case, and you have to pay tax.

naresh

naresh (Querist)

30 April 2022 Thanks for reply
Madam my total income including STCG is below 5 lakh
Am i need to pay income tax
If yes at what rate
Please

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