Capital Gain Exemption u/s 80C

For LTCG there is no chapter VI A deduction.

You will get Maximum Deduction U/s 80C of Rs. 35000

Dear all

In the above case, the other income is 35k and LTCG is 500K. I am aware that other income needs to be taxed on progressive tax slab rates for an individual and special rate will be applied for computing the tax liability on LTCG.

My knowledge in tax is limited, so i need clarifications for the following points:

1. Is deduction u/s 80 is allowed only when your gross total income exceeds maxmium exemption limit as what it has been said in previous threads for computation of tax liability. In case if i have paid a LIC premium of 50k  then am i allowed to net off this premium against the other income of 35K and can i adjust the balance premium paid for 15K agains the LTCG income.

2. Further, am i allowed to use the unexpired portion of  the income not chargeable to tax i.e 160K (assuming it to be for AY 2011-12) agains the LTCG of 500K. If yes, then under what section of income tax act it is permissible.

3.  In case both the above 2 options are followed then the taxable capital gain will be only 340K. Am i correct in calculating this.

Thanks to all tax experts.

Dear Friends,

At the time of claiming deduction How to reduce the MANCT from Other Incomes......whats logic ?

As per my knowledge and IT Act Language*  Deduction Claim as follows :

When you got Gross Total Income(GTI), than see that howz your STCG U/s 111A, LTCG U/s 112 & Other Incomes and after that :  

 GTI (-) STCG U/s 111A (-) LTCG U/s 112 = Amount eligible for Deduction under chapter VI-A

Hence, in above mentioned case

GTI Rs. 535000 less LTCG Rs. 500000 = 35000/- is eligible for deduction under Chapter VI-A

*  IT Act Language “Section 112 (2) Where the gross total income of an assessee includes any income arising from the transfer of a long-term capital asset, the gross total income shall be reduced by the amount of such income and the deduction under Chapter VI-A shall be allowed as if the gross total income as so reduced were the gross total income of the assessee.”

All  Comments are most welcome

Thank You

Dear Sachin Sir,

Ans of Q1

No Deduction under chapter VI-A allowed from LTCG income therefor in your example Rs. 15000/- not Deductible(Refer Sec 112)

Ans of Q2

Yes, You are eligible to use unexpired portion of MANCT(i.e. 160000/-) (Refer Sec 112)

Ans of 03

Yes, You are absolutely correct, the taxable capital gain will be only 340000/- (as I am calculate above mentioned threat)