Tax on stcg on equity share (stt paid)
This query is : Resolved
17 July 2014
Please clarify this
If someone has Rs. 10,000 STCG from sell of equity share (STT paid) and he has no other income. This means for Fy 2013-14 he has only income under the head of capital gains i.e. Rs. 10,000 only. Does he required to pay tax of 15.45% of Rs. 10,000 or there wont be any tax liability as total income for the FY 2013-14 is less than Rs. 2,00,000 i.e. minimum slab.
Please help. I had put this query earlier also, but no body replied.
If someone has Rs. 10,000 STCG from sell of equity share (STT paid) and he has no other income. This means for Fy 2013-14 he has only income under the head of capital gains i.e. Rs. 10,000 only. Does he required to pay tax of 15.45% of Rs. 10,000 or there wont be any tax liability as total income for the FY 2013-14 is less than Rs. 2,00,000 i.e. minimum slab.
Please help. I had put this query earlier also, but no body replied.
17 July 2014
yes slab will be available to him and if the tax is below 2,00,000 then yes no tax payable.
17 July 2014
But what about special rate applicable under 111A? IT officer has denied no tax if no other income and asked to pay 15.45% as special rate of tax on Rs. 10,000. Is it right?
26 July 2025
Great question! Here’s the clear explanation about **Short-Term Capital Gains (STCG) on equity shares with STT paid** and tax slabs:
---
### Key points:
* **STCG on equity shares where STT is paid** is taxed at a **special flat rate of 15%** under Section 111A, plus applicable cess and surcharge (making it roughly 15.45%).
* However, **Income Tax slabs and basic exemption limits do NOT apply to this special rate income**.
---
### What this means for your Rs. 10,000 STCG example:
* Even if your total income (including this STCG) is below the basic exemption limit (e.g., Rs. 2,00,000), you **still have to pay tax at 15% on the STCG**.
* The basic exemption slabs apply only to **regular income (like salary, business income, etc.)**, not to capital gains taxed under special rates like Section 111A.
---
### So, the IT officer is correct to demand tax of about 15.45% on Rs. 10,000 STCG, even if you have no other income.
---
### Summary:
| Scenario | Tax implication |
| ------------------------------------------------ | ------------------------------------------------------------------ |
| STCG on equity shares (STT paid) | Taxed at flat 15% + cess (Section 111A) regardless of total income |
| No other income & total income < exemption limit | Still tax is payable at 15% on STCG |
| Regular income under exemption limit | No tax if below slab |
---
**In short:** You cannot avoid the 15% tax on STCG from shares just because your total income is below the basic exemption limit.
---
If you want, I can help you with the exact calculation including cess or how to report this in your ITR. Need help with that?
---
### Key points:
* **STCG on equity shares where STT is paid** is taxed at a **special flat rate of 15%** under Section 111A, plus applicable cess and surcharge (making it roughly 15.45%).
* However, **Income Tax slabs and basic exemption limits do NOT apply to this special rate income**.
---
### What this means for your Rs. 10,000 STCG example:
* Even if your total income (including this STCG) is below the basic exemption limit (e.g., Rs. 2,00,000), you **still have to pay tax at 15% on the STCG**.
* The basic exemption slabs apply only to **regular income (like salary, business income, etc.)**, not to capital gains taxed under special rates like Section 111A.
---
### So, the IT officer is correct to demand tax of about 15.45% on Rs. 10,000 STCG, even if you have no other income.
---
### Summary:
| Scenario | Tax implication |
| ------------------------------------------------ | ------------------------------------------------------------------ |
| STCG on equity shares (STT paid) | Taxed at flat 15% + cess (Section 111A) regardless of total income |
| No other income & total income < exemption limit | Still tax is payable at 15% on STCG |
| Regular income under exemption limit | No tax if below slab |
---
**In short:** You cannot avoid the 15% tax on STCG from shares just because your total income is below the basic exemption limit.
---
If you want, I can help you with the exact calculation including cess or how to report this in your ITR. Need help with that?
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