Sorry if my question is naive. When we claim LTA without submitting any supporting documents the entire amount is taxable. After paying tax (in the respective slab) for the claim if we invest the same in something like shares/mutual funds/fixed deposits less than 5 year etc. The profits gained (short term capital gain/interest/dividend etc) is again taxable. Is there any rule to avoid such double taxing. Is it possible to object such a double taxing. Pl. clarify
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Income tax on already taxed income
Replies (3)
If you keep ur tax income in cupboard - nobody is going to tax you.
The moment you try to multiply it -like investing in a House or buying a lottery etc then extra income is taxed. I dont think this is double taxation. You are not taxed on original income but on increase part of income.
Yes if u reinvest, its taed again. If you make money from taxed money, it will be taxed again on the income part not the base part.
Thanks for the reply
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