shortterm capital gain

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This query is : Resolved

jaigurudev (Querist)

10 February 2010 i have bought shares of rs.70 lac and same has been sold
purchase cost.7000000
brokerage.20000
stt.12000
sales at.9900000
how much i have to pay incometax?
should i have to audit my book?
brokerage and stt will allowed as exp?

CMA. Dinesh S Adhikari, ACMA

CMA. Dinesh S Adhikari, ACMA (Expert)

11 February 2010 I hope that you are not engaged in the business of sale & purchase of Shares.

If yes, then this this income will be taxable under PGBP head, and computation will be as follow:

Profit = Sales - Cost of Acquisition - Brokerage - STT

Then tax on above profit amount as per normal slab rates, and you will have to do tax audit also.

but if this is not your business activitiy then same profit will be taxable under CAPITAL GAIN, and computation will be as under.

STCG =Sale Consideration - brokerage on sale - COA(including brokerage on purchase)
therefore, STCG = 2,880,000

and tax on STCG is @ 15%(as per sec 111A), therefore tax will be:

TAX = 2,880,000 *15% = 432,000*
*increase by EC & SHEC

Please Note:
# STT is not allowed in computation of Capital Gain, STT is only allowed in PGBP computation u/s 36(Other deductions)
## If above shares are held as Long Term Capital Assets and Profit on these are as LONG TERM CAPITAL GAIN, then same gain will be exempt u/s 10(38).

Regards!!!

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