Income Tax for Pvt Ltd Company

Dear Sir,

PLZ CLARIFY

1)  WHETHER THE INCOME FROM INVESTMENT IS TREATRED AS "BUSINESS INCOME" OR "CAPITAL GAINS"

2) AND IF CAPITAL GAIN THEN IT'S NATURE LIKE SHORT TERM OR LONG TERM?

Amir, I have modified the question to clarify your points.

CASE A :

Net Profit from Business : 10,000

Net STCGains after set off agains the same head : 10,000

Total Income : 20,000

CASE B :

Net Profit from Business : 15,000

Net STCGains after set off agains the same head : 48,000

Total Income : 63,000

CASE C :

Net Loss from Business : (25,000)

Total STCGains : 60,000

Total Income after set off of loss from business : 35,000

CASE D :

Net Loss from Business : 10,000

Net STC loss : 50,000

Both the above losses allowed to be carried forward to be set off against future business income & capital gains respectively

Aditya,

Thanks for the info.

How is Corporate Income Tax Computed ? Is it computed separately for Business Income, Equity STC Gain & Debt  STC Gain ? At what rates ? Can u specify for each case given ?

STC Gains if STT is paid on sale of Mutual Funds then it is taxable u/s 111A @ 15% + EC @ 3%. And in case of other STC Gains will be taxable @ 30% + Ec @ 3%. Surcharge applicable if total income exceeds Rs. 1 Crore.

Can you give illustration of actual computation of Income Tax for one of the cases ?

Thanks for the illustration. I know that Tax rates are different for ST Gains from Equity & Debt Mutual Funds. How will this get reflected in the computation ?

What happens if there is a loss in business income & ST Gain from Mutual Funds ?

Case A

Net Profit from Main Line of Business = 10,000

Short Term Capital Gain from Equity Mutual Funds = (20,000)

Short Term Capital Gain from Debt Mutual Funds = 30,000

NET PROFIT FOR THE BUSINESS IS 10000 @ 30% PLUS CESS AND SURCHARGE

SHORT TERM CAPITAL GAIM ** ( nOTE)

Case B

Net Profit from Main Line of Business = 15,000

Short Term Capital Gain from Equity Mutual Funds = 50,000

Short Term Capital Gain from Debt Mutual Funds = (2,000)

NET PROFIT FOR THE BUSINESS IS 15000 @ 30% PLUS CESS AND SURCHARGE

SHORT TERM CAPITAL GAIM 48000 * ( nOTE)

Case C

Net Profit from Main Line of Business = (25,000)

Short Term Capital Gain from Equity Mutual Funds = 40,000

Short Term Capital Gain from Debt Mutual Funds = 20,000

NET PROFIT FOR THE BUSINESS IS (25000)  CAN BE SET OFF IN SUBSEQUENT BUSINESS INCOME

SHORT TERM CAPITAL GAIM 60000* ( nOTE)

Case D

Net Profit from Main Line of Business = (10,000)

Short Term Capital Gain from Equity Mutual Funds = (20,000)

Short Term Capital Gain from Debt Mutual Funds = (30,000)

U CAN CARRY FORWARD THE BUSINESS LOSSES AND STCL FOR SET OFF IN SUBSEQUENT YEARS

Equity schemes ** 15%
Debt schemes 30%

Subhash,

See if the following tax computation is correct :

Case A

Tax on Business Income of 10000 @ 33.99% = 3399

Tax on STCG of 10000 @ 30% = 3000

Total Tax = 6399

Can business loss for current year be set off against STCG for current year ?

Is Cess applicable only if the business income > 10 lakhs ?