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Calculation of Income Tax Payable

Rajib Saha (Accounts Officer) (239 Points)

19 October 2021

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.

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6 Replies

Vikram Bansal (Accountant, Manager) (6 Points)
Replied 19 October 2021

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.

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 19 October 2021

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

Sonal Agarwal (Chartered Accountant) (41 Points)
Replied 20 October 2021

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

Rajib Saha (Accounts Officer) (239 Points)
Replied 20 October 2021

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

Sonal Agarwal (Chartered Accountant) (41 Points)
Replied 21 October 2021

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!!