Income Tax on Short Term Capital Gains

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Subbiah Mathurappan

141 Points Joined April 2017

Sir,
I am Senior Citizen drawing pension and earning interest on bank deposits and income from house property. My total income after taking into account of all deductions and exemptions cones around ₹375000/- I also earned Short term capital gains of ₹35000/- on sale of equity shares. If I club both the income, it comes around ₹410000/-.I understand that the tax payable on ₹410000/- will be exempted as a tax rebate under section 87A. Please clarify the correct position. If my calculation is wrong please guide me to arrive at the amount of income tax payable. Thanks in advance.

Replies (8)

CMA Poornima Madhava

CMA

13117 Points Joined May 2009

You are right. Since the taxable amount is <5 lacs, no tax would be payable. But if you have any TDS credits, you are required to file ITR to claim refund of tax.

Subbiah Mathurappan

141 Points Joined April 2017

Thanks for the prompt clarification Madam.

Samantha J

1236 Points Joined March 2019

If you have made short term capital gains, tax will be payable on it alone. You will pay STCG @ 15%

aditya sood

practice as advocate

111 Points Joined January 2015

You have to pay short term capital gain @ 15 % on 35000 rest of your income from pension and saving bank interest was below the taxable limit . you have to pay tax only and only on short term gains. kindly read section 111A of the Income Tax Act 1961.

Samantha J

1236 Points Joined March 2019

When you file returns,the STCG will be taxable.Now since your total income is less than Rs 5 L , rebate of tax payable in STCG will be allowed,thus ultimately you will not pay tax . The difference is that it's "rebate" not "exempt" which means that if your TI is > 5L then no rebate 87A and you pay full tax on STCG !

Subbiah Mathurappan

141 Points Joined April 2017

Thanks for the replies.

aditya sood

practice as advocate

111 Points Joined January 2015

I stands corrected if any person income was below taxable limit i.e 5 lakhs and also income from stcg , rebate of under section 87A is applicable reason being short term capital gain is computed with other income for the calculation of tax.