A weird Section 111A

Dear Arvind

The section 111A bare act has been posted out here and not from here.

We all know it is wrong.

Dear All,

I have studied the discuusion here and referred to the Income Tax Act on incometaxindia.gov.in. There is an asterik(*) in the provisio which says that '15should be read instead of 10' and thus intends to make rectification in the ACTUALLY WRONG Provision. The asterik (*) nowehere mentions the Finance Act by which the said amendment (may) be made. Actually the amendment has been made by Finance Act 2008 and the said amendment is only in clause (i) is sub section (1) of sec. 111A. And no amendment has been made in the poviso. The change in the proviso is not supported by any Finance Act/Notification/Any amendment of law.

I have referred V.K Singhania Income Tax Ready Reckoner for A.Y 2010-11 and 2011-12 and it specifically mentions the rate of 10% in the proviso and by a specific foot note it clearly mentions that this rate of 10% is not 15% (emphasis aplied).

However in the example72-E5 it uses the rate of 15% only (even though the case clearly falls in the proviso) instead of 10% (Which is as per law and as per itsown explanation).

There is this anamoly in the Ready recokner itself.

In my view there is this ANAMOLY / MISTAKE in the act itsef BUT the loophole is so obvious that no case can stand in the court of law so as to take the benefit. So the benefit should not be taken.

But Yes There is an anamoly and there is CARELESSNESS on the part of law makers.

Thanks.

Give your views about my explanation.

I concur with the view of Gaurav. The same is mentioned in the post given by me above.

I have given a disclaimer in the above post as the same was posted in tax planning and please do not carry out any tax planning in the same as no planning is possible as per the Income Tax Act and also in view of the discussion above.

It is just a mistake committed in amending the section 111A. However it is so obvious and apparent that even a novice can recognise that, and as opine other expert NO one will date to take benefit of it. We expect amendments by next Finance Act

Being practical & knowing our dept, one should not risk taking 10%.....

But how will the same be amended as i think this was the last time the Finance Act had amended Income Tax Act as from next year onwards we have Direct Tax Code.

However the government is mad behind retrospective amendments (like in section 9 for 34 years) and could even amend retrospectively repealed acts.

i hope that the new dtc brings for us more clarity and a single rate on this section.

Dear Sirs,

Kindly Clarify whether Short Term Capital Gains (STCG) of DEBT MUTUAL FUND comes under Section 111A or not. Where should I mention this in ITR-2 whether in (3ai) or (3aii)? Please clarify.

STCG of DEBT MUTUAL FUND is clubbed with Total Income and Tax is calculated as per the Tax Slabs.

Is the above is correct? Should I mention this in (3ai) or (3aii) of ITR-2. Please reply.

Jyotika

No STT is paid on sale of Debt mutual fund and hence not entitled to special rate u/s 111A and taxable at normal slab rates.

So mention this in (3aii) of ITR-2