A weird Section 111A

Sir, I checked out Sec 111A on incometaxindia.gov.in. There is an asterisk(*) marked next to the words 'ten' which says that 'words fifteen needs be substituted for ten'. So it is clear that it would be 15% instead of 10%.

But on the other hand, its surprising why the words have been replaced in the main section and not in the proviso..Nice discovery sir.. 

Same question raised before:

/forum/anomalities-in-section-111a-49201.asp

Please get back if there is more to discuss after reading this.. I like to discuss more on such wierd topics...

Rightly Said sir, your inetrpretation is write. I treid it by taking two cases, and what you said is absolutely correct. the only crux is that the person will get dedcution of teh taxable limit, and once it crosses that CG will be taxable at 15%.

For understanding I posted the Cases here. Let me know if my interpretation is wrong.....

Thanks Sir, for highlighting this and sharing this with us for increasing our knowledge.

Well my interpretation is slightly different.....( Rahul sir your interpretation is perfect as per the explanation given as above..)

a)  the transaction of sale of such equity share or unit is entered into on or after the date on which Chapter VII of the Finance (No. 2) Act, 2004 comes into force; and

          (b)  such transaction is chargeable to securities transaction tax under that Chapter,

the tax payable by the assessee on the total income shall be the aggregate of—

           (i)  the amount of income-tax calculated on such short-term capital gains at the rate of ⁶⁰[fifteen] per cent; and

60, which is super scripttttt have to be read... its written. 60. Substituted for “ten” by the Finance Act, 2008, w.e.f. 1-4-2009.

and for the Asterik my one of the friend already mention ... its says that  *Word “fifteen” need be substituted for “ten”.

SO i think so it will be 10% only positively.....

PLS CORRECT IF I AM WRONG...

ya ur right sir , it is clearly mentioned in the finance act 2009

@ Aditya sir thanx for bringing this into notice.

@ Rahul Sir nice explanation of the provisions. But sir wt Anuj told is right even i checked there is an asterix in the proviso . The proviso is as under

Provided that in the case of an individual or a Hindu undivided family, being a resident, where the total income as reduced by such short-term capital gains is below the maximum amount which is not chargeable to income-tax, then, such short-term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such short-term capital gains shall be computed at the rate of ten* per cent.

The Asterix says - *     *Word “fifteen” need be substituted for “ten”.

So this makes it clear that the percentage is 15% only the change has been brought into the proviso through an asterix.

@ Shivang Sir ur right,  yes that asterix has to be read to interpret the law

@ Anuj very well read and interpreted dear friend.

In my opinion also the rate will be 15% for STCG whether the other total Income excluding STCG falls below basic exemption limit or not.

Regards

Prasad R

HI,

After reading this thread I have gone through the text in book  as well as TAXMANN software data.I agree with  Mr. Aditya's observation as far as text is concerned but in terms of interpretation there is no any illusion because there is clearly an asterix mark on the rate 10% which leads to the need to change it to 15%.

So, as per my view there is no any weirdness.

Regards. 

Hi Aditya Sir,

Nice observation............!

And yeah its a miss

I think no assesee will dare to take the benefit of this loophole because the day it will be rectified I am sure the amendment would be given a retrospective effect....

IS there anything to rectify as two points clearly states that 10% as of now..

@ Amir: yes it will be 15% with retro effect if its amended...
 

I Think Its Just a loophole & No One Can Dare to Take The Benefit of Same as Above Said by Amir........

Just a Mistake by Dept While Posting

I think all of you are wrong or reading the outdated books.

because i have read the income tax ready reckoner from GARG,s publication

for the A.Y. 2010-2011 & 2011-2012

in which there is no mention of 10% rate.

check the website               www.gargsonline.org

please forgive me if i have said anything wrong.

@ arvind.. i think ready recknoer needs to be updated.... Just kidding.. please refer to IT act....

Disclaimer:

This is a folly by the Finance act which simply forgot to amend the second 10% appearing in Section 111A. In fact, I checked on the department web site which carried taxmann's version of Act and there it says that "*Word “fifteen” need be substituted for “ten”.

please check the below attached file

ur doubts will be cleared.......