Doubt about stcg tax

NO WAY... no tax shall be paid in such case.

If your total income including STCG(other than stcg u/s111A arising on sale of shares) is less than Basic Exemption limit then obviously you are not liable to pay tax.

But if your total income includes LTCG  or STCG u/s 111A which are taxable at flat rate of 20% or 10% respectively, then the case is something different. In such a case you need to pay Bifurcate your total Income in two parts

Part A-LTCG and/or  STCG u/s 111A

Part B-Other Incomes

Part A incomes will be liable to tax @ 20% or 10% or both(if includes LTCG as well as STCG u/s 111A)

Part B income is liable to tax as per slab rate basis.

But there is a concept of marginal relief of capital gains tax , under which if your Toatal Income(other than LTCG and Stcg u/s 111A) is less than Basic Exemption limit  then an amount equal to  the difference  b/w Basic Exemption limit and Total Income (other than LTCG and Stcg u/s 111A)  is allowed to be deducted from separately considered STCG u/s 111A or LTCG as a relief for not having much other incomes other than LTCG or STCG u/s 111A.

Hope its clear.

Originally posted by : Saurabh
	If your total income including STCG(other than stcg u/s111A arising on sale of shares) is less than Basic Exemption limit then obviously you are not liable to pay tax. But if your total income includes LTCG  or STCG u/s 111A which are taxable at flat rate of 20% or 10% respectively, then the case is something different. In such a case you need to pay Bifurcate your total Income in two parts Part A-LTCG and/or  STCG u/s 111A Part B-Other Incomes Part A incomes will be liable to tax @ 20% or 10% or both(if includes LTCG as well as STCG u/s 111A) Part B income is liable to tax as per slab rate basis. But there is a concept of marginal relief of capital gains tax , under which if your Toatal Income(other than LTCG and Stcg u/s 111A) is less than Basic Exemption limit  then an amount equal to  the difference  b/w Basic Exemption limit and Total Income (other than LTCG and Stcg u/s 111A)  is allowed to be deducted from separately considered STCG u/s 111A or LTCG as a relief for not having much other incomes other than LTCG or STCG u/s 111A.   Hope its clear.

So If my total income is 180000 (incld 60000 STCG U/s 111A) then I need to pay tax on 60000 & I get a relief of 70000 [190000 -(180000-60000)] ??

Relief wiil be restricted to the Short term Capital gain u/s 111A. 

Originally posted by : Saurabh
	Relief wiil be restricted to the Short term Capital gain u/s 111A.

u mean Tax on STCG right??

No, in your case no tax is required to be paid , because relief  of Rs. 70000 is making your STCG as zero ( because relief of Rs. 70000 is to be restricted to Rs. to STCG -60000) ........Since your STCG is zero then obviously no tax.

So I will be liable to pay tax on STCG only in case where my STCG is More than my Total Income excluding STCG?

ex- Total Income = Rs. 300000 ( incld. 200000 STCG)

so Relief = Rs.90000 [190000- (300000-200000)]

therefore, Taxable STCG = 200000-90000

                                                = 110000

am i right?

Yes absolutely correct.............

Thanks a lot Saurabh :)