Sold shares
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
22 March 2011
i Sold shares of reliance industries and other companies after 6 months and made a profit of Rs. 40,000. I did not have any other income from any other source. Since my total income was below Rs. 1,60,000 will i have to pay tax on Rs. 40,000? A friend says that i have to pay a short term capital gain tax of 15% even if my total income is below Rs 1,60,000. Please help sir.
CA Namrata Dedhia
(Expert)
22 March 2011
If your total income is below Rs.1,60,000, you need not pay tax on the Short Term Capital Gain.
22 March 2011
Firstly in your case no need to pay any tax.
However if you have any income more than maximum amount not chargeable to tax then following provisions apply.
If total income includes Short term capital gain and the Income other than Capital gain falls short of amount not chargeable to tax, then the assessee can shift so much amount of capital gain to other income so as to make other income equal to Maximum amount not chargeable to tax.
Eg:
Taxable Income Rs. 200000.00 ( including capital gain on shares of Rs. 60000.)
Now if we see the Total income excluding capital gain is Rs. 140000.00.
Now what assessee can do is he will shift Rs. 20000 from capital gain to make his total income equla to maximum exemption limit.Therefore he need to pay tax only on Rs. 40000.
Hope your query is solved.
However if you have any income more than maximum amount not chargeable to tax then following provisions apply.
If total income includes Short term capital gain and the Income other than Capital gain falls short of amount not chargeable to tax, then the assessee can shift so much amount of capital gain to other income so as to make other income equal to Maximum amount not chargeable to tax.
Eg:
Taxable Income Rs. 200000.00 ( including capital gain on shares of Rs. 60000.)
Now if we see the Total income excluding capital gain is Rs. 140000.00.
Now what assessee can do is he will shift Rs. 20000 from capital gain to make his total income equla to maximum exemption limit.Therefore he need to pay tax only on Rs. 40000.
Hope your query is solved.
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