Vijit (Self Employed) (57 Points)
19 February 2015Hello everyone,
Sir/Ma'am,
I have 2 queries as follows:-
1. In case of long term capital gains from stocks in FY 2014-15 whether the income received will be clubbed with my net salaried income for FY 2014-15.
2. If YES, then if I am in the bracket of 10% and after clubbing capital gains from stocks my income falls into 20%, do I have any option to reduce my income tax.
Thank you very much.
Swami Ayyappa Nuli
(TAX ADVISOR & CONSULTANT AT G.S.T SUVIDHA CENTER)
(1372 Points)
Replied 19 February 2015
If the Transfer of those Long term stocks attrarct Security Transaction Tax then such income will be exempt in your hands u/s.10(38). You should show it under the head Capital gain and deduct form it as exemption u/s.10(38) and show NIL value in outer column. Then tax will be levied only on Salary amount. If they are not subject to STT then such income is not exempt and furthur 80C deductions will also be not available against such income. The only option you have is to purchase or construct Residential house property before filing of return for A.Y 2015-16. If you dont have enough time to buy or construct, deposit amount in Capital Gain Deposit account before filing of return( You should invest entire amount i.e entire sale consideartion to avail benifit u/s.54F) and utilise it for the buying purpose with in 2years from the end of relevant Assessment year and with in 3 years if you want to construct building. Othewise if you have bought a residential property just before one year before the date of transfer, you can get exemption under section.54F. For Longterm capital gain of this nature this is the most possible exemption.
Vijit
(Self Employed)
(57 Points)
Replied 19 February 2015
Thank you very much Sir, for such detailed suggestion. STT is already deducted, so this income is tax free and won't club to my salary, regardless of my tax bracket, right?
Swami Ayyappa Nuli
(TAX ADVISOR & CONSULTANT AT G.S.T SUVIDHA CENTER)
(1372 Points)
Replied 19 February 2015
Yes. Your Income from the transfer of Longterm capital gain on which STT paid is exempt, Hence not taxable in your hands. General Suggestion: You should not say clubbing provisions. You should use term "Clubbing" when other assessee income is included in your income. Thank you.
Vijit
(Self Employed)
(57 Points)
Replied 20 February 2015
Sir, One more thing, I have this confusion, if I have short term capital gains and STT is paid, will it add to my salaried income?
Swami Ayyappa Nuli
(TAX ADVISOR & CONSULTANT AT G.S.T SUVIDHA CENTER)
(1372 Points)
Replied 20 February 2015
STCG on sale of securities is not exempt and taxable at flat rate of 15% u/s.111A. It is to be included in Gross Toal Income. But one thing, even if you are in 10% slab after including capital gain with Salary, you need to pay tax @ 15% on such STCG. for e.g. if you have salary income of Rs.3,00,000 and STCG of Rs.1,00,000. Deduction from 80C to 80U available to you are 3,50,000. then Tax liablility will be as follows.
Income from Salary = 3,00,000
Income form STCG u/s.111A = 1,00,000
----------------
Gross Total Income = 4,00,000
Less: Deductions u/s.80C to 80U =(3,00,000) (Since Chapter VIA deductions are not available ---------------- against LTCG u/s.112 and STCG u/s.111A)
Net Taxable Income 1,00,000
Tax on above: 1,00,000* 15% =15,000 (Even you are in 2,50,000-5,00,000 slab, your income u/s.111A taxable @ 15%)
Add: Cess @ 3% = 450 --------------
Net Tax Liability = 15,450
Note: You should using basic exemption limit against LTCG/STCG after utilising for all other souces of Income.
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