Anomalities in Section 111A

ya..! its right.............In the Act, also, it  is written that, "the word "ten" needs to be substituted by "fifteen"..........................................!!!!!!!!!!!!!

Juzer..... This is not restricted to 111A, you will also find the provision on section 112 to set off the LTCG against unexhausted exemption limit. Then, applying the same tests that you applied above, your income is taxed at 20%. 

I think the provisions of section 112 are slightly more interesting, because there is the re-investment option. So in your own example, if you had LTCG of 8Lakhs and 1lakh normal income.

Then your taxable LTCG would be only 740,000/- and tax would be 138,000/-. But here you have the option to avoid that tax also by re-investing the sum.

I think that 111A is actually a pain.. cos 

(a) high rate of tax - 15%.  You could rather speculate on the stock exchange if you are in the lower bracket, then u pay 10% tax on the speculative income.

(b) Why only equity shares on units in equity oriented funds are covered? Why not same provision for other short term capital assets? The line between business and capital transactions should also be clearly defined.

Dear Mr. Dashing Hunk,

Can I know your name?

Well I really dont understand what you are trying to say.

What I have manipulated is the rate of 10% replacing rate of 15% as provided in provsio to 111A.

I really dont get you for "a" the speculation on the stock exchange and lower bracket? I think you are talking about intraday transactions (which if considered under head capital gains, it shall not attract rates of section 111A - ask me if you dont understand this)  or income from trading in Stock exchange chargeble under head PGBP. Well in that case too, u can get advantage of income upto Rs.250000. However in above manipulation u can get advantage of 10% for any amount subject to application of surcharge.

In relation to "b" I would like you to read my theory minutely again. I am sure you shall make out this time. 

Suggession:- The law is not to be read as novel or story, you need read words between the lines.

Thanks

Hey sorry about taking this thread in the wrong direction. My apologies. Hope u c my PM. Good original post.

Dear Friend,

I have responded to your pm, please read it and let me know ur views.

Regards

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

Mr juzer finally pranav dada read this topic and sort out the anomalities in sec 111A.....

Now, Finance Act, 2012 has amended SEC 111A w.r.e.f 1-4-2009.

Thus now all places where there was 10% is 15%. Now the wordings of Provio are as follows

"

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 fifteen per cent.

(2) Where the gross total income of an assessee includes any short-term capital gains referred to in sub-section (1), the deduction under Chapter VI-A shall be allowed from the gross total income as reduced by such capital gains.

(3) Where the total income of an assessee includes any short-term capital gains referred to in sub-section (1), the rebate under section 88 shall be allowed from the income-tax on the total income as reduced by such capital gains.

Explanation.—For the purposes of this section, the expression “equity oriented fund” shall have the meaning assigned to it in the Explanation to clause (38) of section 10.’.

"

i dont care u fools