Doubt in Taxation - PCC AY 2009-2010

Tax queries 1366 views 8 replies

Siddharth Prasanna

Articled Assistant

160 Points Joined September 2009

There are certain incomes for which specific rates of tax are preferred in the Income Tax Act itself.

eg. Sec 111A- STCG on listed securities transferred on or after 1/10/2004 subjected to STT , is charged @ 15%

Similarily there are a few sections such as 112, 115A, 115AB, 115AC, 115 ACA, 115 AD, 115B, 115BB, 115BBA, 115 E that have specific rates of tax. (those aren't included in the Total Income)

My doubt:

1) Are they subjected to Surcharge? If so, how do we calculate them?

2) U/s 115 AD, LTCG arising from securities other than u/s 115 AC are subjected to 10% of tax- is this 10% after or befre giving indexation?

3) u/s 115 AD, STCG arising from securities other than u/s 115 AC are charged at 30% subject to STT 15%- Am not clear with this particular provision. I hope you people will throw more light on this.

Please clarify my doubts. Thanks .

Regards

Sid

Replies (8)

Shudhanshu Agrawal

Business

2570 Points Joined May 2008

1. Surcharge is calculated on Total Tax Liability (except EC & SHEC), so according to me surcharge should be levied on the tax calculated under these sections.

Do correct me if i am wrong.

Siddharth Prasanna

Articled Assistant

160 Points Joined September 2009

1) Yes Shudanshu. I went through the provisions again to understand them. They are a part of total income and surcharge is calculated on such total income.

2) And with regard to the LTCG doubt that I asked, it is after indexation only.

3) Am not able to understand the STT part in my 3rd doubt. Someone clarify please.

Juzer Sadikot

CA - innovative solutions for Imports an

1309 Points Joined November 2008

Dear Sid,

Well I am yet to understand how you have concluded the 1st Question.

However for for your

2nd Query; rate of 10% shall apply before giving effect of indexation; refer below text of section 115AD (3)

(3) Nothing contained in the first and second provisos to section 48 shall apply for the computation of capital gains arising out of the transfer of securities referred to in clause (b) of sub-section (1).

and for 3rd query

the STCG on which STT are charged are taxed at concessional rate u/s. 115AD may be because of following;

1) STT is already charged on sales transaction.

2) Increase in volume of Transactions in Rec Stock Exchange help Indian economy to do better and attarct foreign investors.

3) u/s. 111A also, STCG on such shares are taxed at concesional rate;

So for what exactly you are uncomfortable ?

Do let me know if you want more light on this.

Thanks