Can anyone please help me to solve this income tax problem

CAN ANYONE PLEASE HELP ME TO SOLVE THIS INCOME TAX PROBLEM
Mr. X(43yr, Non-resident) has the following income during AY 2012-13

Income from HP- Rs. 2,18,500
Business Income – NIL
Income from card games – Rs. 2,16,000
Short Term Capital gains(STCG) – Rs. 4,22,000
There is an unabsorbed depreciation of Rs. 2,06,000
Find the net income and taxable liability of Mr. X for the AY 2012-13
If STCG is due to sale of shares after deducting STT

Thanking all
Shibendu Banerjee

Replies (8)

Solution is as follows:

a) GAV of HP - Rs. 218500

standard deduction of 30% - Rs.65550

NAV of HP = Rs. 152950

 

b) Short term capital gain Rs. 422000 (taxable at 15%)

c) Card game - Rs.206000 (taxable at 30%)

d) Unabsorbed deprecation Rs.206000 - set off against house property income of Rs.152950 and balance against capital gains. Hence capital gains beccomes (422000-53050)= 368950*15%

 

total tax will be 30% of 206000 + 15% of 368950 = 64800+28343 = 93143 

 

Thanks a lot Parveen. I want a litl more help, if Mr. X is a resident then what will be the exact solution?

Sory sir u r Praveen, sory for spelng mistake.

I dont think there will be any changes. 

But sir, if Mr. X is a resident then can we apply sec 111A ?

Taxability of short term capital gains

     Section 111A of the Income tax Act provides that those equity shares or equity oriented funds which have been sold in a stock exchange and securities transaction tax is chargeable on such transaction of sale then the short term capital gain arising from such transaction will be chargeable to tax @ 15% from assessment year 2009-10 onwards.

Income from HP(Let it is GAV)……  Rs. 2,18,500
Less: Std Deduction @ 30%.................(Rs. 65550)
NAV...........................……………….Rs.1,52,950
LESS: unabsorbed Dep……………..(Rs.1,52,950)
Then Income from HP……………………. NIL
STCG………………………………........ Rs. 4,22,000
Less: remaining unabsorbed dep…..(Rs. 53,050) 
Net STCG…………..…......................... Rs. 3,68,950
Card Games………………………..….Rs. 2,16,000
Net Income……………………….....…Rs 5,84,950
Tax Liability for AY 2012-13  
Tax On card games( Rs 2,16,000*30%) Rs.64,800
Add: Tax on 3,68,950 @ 15% = (3,68,950-1,80,000)*15% = Rs. 28,343  
Tax…......…………………………..............................................Rs. 93143
Add: Education Cess……………………………….................Rs. 1,863
Add: Secondary & HE Cess ………......................................Rs.     931  
Total Tax liability (Rounded off)…….......................................Rs.95,940
(I Think this is what Praveen sir's complete solution)

Note:- An alternative solution can be made but that will make higher tax liability for Mr. X     
Like Deduct all unabsorbed depreciation from STCG (i.e 4,22,000-2,06,000= 2,16000)
then income from HP (NAV) – 1,52,950; STCG- 2,16,000; Card game – 2,16,000
Tax on card game= 64,800
And Tax on income from STCG U/S 111A = [(1,52,950+2,16,000) –(1,80,000-1,52,950)]*10%=34,190
so toal tax =64,800+34,190 = 98,990 , Edu cess @ 3% i.e 2,970
Total tax liability = 98,990+2970 = Rs. 1,01,960 which is Rs. 6,020 higher than previous.

I think both are correct. 

You can always take the benefit in this case.

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