Calculation of Income Tax Payable

Sir/Madam,

An Assesee earned Long Term Capital Gain of Rs. 2,74,000/- ( subject to STT) on sale of  "UTI Healthcare Fund (G) [ ISIN : INF789F01695]" . He has other Income totaling to Rs. 3,57,000/- . How his Tax Payable will be calculated?

May kindly guide me.

Replies (6)
Quick Summary
This discussion explains how to calculate income tax payable when an assessee has both Long Term Capital Gains (LTCG) from mutual funds and other income. It details the tax treatment for LTCG under Section 112A, including the 10% tax rate after a Rs. 1 lakh threshold, and how the remaining income is taxed at normal rates. The calculation also covers the addition of Health & Education Cess and clarifies that the rebate under Section 87A is not applicable to LTCG taxed under Section 112A.

Income tax payable is a type of account in the current liabilities section of a company's balance sheet. It is compiled of taxes due to the government within one year. The calculation of income tax payable is according to the prevailing tax law in the company's home country.

Tax @ 20% will be taxed for LTCG and balance amount and other total income will be taxed as per normal provisions

COMPUTATION OF TOTAL INCOME AND TAX PAYABLE THEREON FOR THE AY 2021 – 22

 

INCOME FROM CAPITAL GAIN

 

Long Term Capital Gain u/s 112A

 

On sale of units of Mutual Fund

274000

 

 

Other Income (assuming no income which is taxed at special rate)

357000

GROSS TOTAL INCOME

631000

Less : Deduction under chapter VIA (assumed)

NIL

TOTAL INCOME

631000

 

 

Special Tax on LTCG of Rs.174000/- @ 10% (after considering threshold deduction of Rs.100000/-)

17400

Tax on Balance Income of Rs.357000/- (assuming age below 60 years)

5350

 

22750

Add : Health & Education Cess @ 4%

910

TAX PAYABLE

23660

 This is the calculation of  tax without considering TDS, Advance Tax and Interest and based on certain assumptions.

I hope it would be helpful for you.

If you have any query after this, please reply.

Thank You

Thank you, Sir, for the detailed calculation. My question is : if LTCG is taxed separately, can't he get benefit u/s 87A?

Section 112A(6) states that "Where the total income of an assessee includes any long-term capital gains referred to in sub-section (1), the rebate under section 87A shall be allowed from the income-tax on the total income as reduced by tax payable on such capital gains."

Sir, therefore rebate u/s 87A is not available against LTCG income u/s 112A.

Hope your query is resolved!!

Thanks a lot for your prompt reply. It will really help me.

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