Income tax liability

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Assessee has Capital Gain Income Only, & he/she claimimg exemption u/s 54F, after claiming this he has some total income which is below exemption limit. Is this attarcts tax liability at special rate applicable for LTCG @ 20% or it will be exempted?

     

Replies (2)

No such income will not be taxable. It will first adujst upto basic exemption limit and remaining income will be taxable @ 20%.

SECTION 112. (1) Where the total income of an assessee includes any income, arising from the transfer of a long-term capital asset, which is chargeable under the head "Capital gains", the tax payable by the assessee on the total income shall be the aggregate of,-    

 (a)  in the case of an individual or a Hindu undivided family, [being a resident,]-      

           (i)  the amount of income-tax payable on the total income as reduced by the amount of such long-term capital gains, had the total income as so reduced been his total income ; and      

           (ii)  the amount of income-tax calculated on such long-term capital gains at the rate of twenty per cent :  

                  Provided that where the total income as reduced by such long-term capital gains is below the maximum amount which is not chargeable to income-tax, then, such long-term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such long-term capital gains shall be computed at the rate of twenty per cent
 

Agreed with Mr.shishir Nayak.

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