Differential Tax Rates

Tax planning 141 views 2 replies

An assessee a senior citizen, has pension income of approx. Rs. 1.80 lacs. He also has LTCG & STCG totalling about 7 lacs. LTCG being 3 lacs & STCG is the balance of Rs. 4 lacs. In this case the unutilized gap of 5% tax up to income of Rs. 5 lacs is Rs 3.20 lacs (5-1.80). In this case the LTCG would be taxed @ 10% after considering initial exemption of Rs. 1 lacs & STCG would be taxed at 15%. Due to non-availability of income taxable at normal rates, can the gap of Rs. 3.20 lacs be first used to calculate STCG tax @ 5%, instead of 15%, and avail the benefit of gap, with lower tax rate, & balance STCG @ 15%. LTCG would continue to be taxed at 10%.

Thanks in advance for the reply.

Replies (2)
Ofcourse you can do this and it is allowed too.

Thanks for your reply. Under which provision of Income Tax, whether Act/Rules/Notifiication/Circular is this allowed? In the return for the ensuing financial yer (20-21), the tax gets calculated automatically. Should we walt for intimation u/s 143(1) & then file rectification application u/s 154. Please advise.

Thanks once again.


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