long term capital gain query

if normal income of an assessee i.e. other than capital gain (both short term and long term), casual income (income from owing and maintaining race horses, gambling etc.) is more than exemption limit, then the amount of capital gain would attract tax on it. And also Deduction u/s 80C-80U will not be allowed from income other than normal income.

In this case, as normal income is rs. 150000 (assuming an individual assessee, man), deduction would be allowed equal to rs. 100000.

So, tax liability would be nil, as he would be allowed to charge deficieny i.e. rs. 100000 (Rs. 150000 being exemption limit - Rs. 50000 being amt. remained after claiming deduction) from Long Term Capital Gain i.e. Rs. 50000. So, after charging deficiency there would not be any income remains in his favour.

In the case above, computatoin will be like this.......(assuming resident individual)

OTHER INCOMES                                  :                 150000

LTCG                                                        :                    50000

GROSS TOTAL INCOME                       :                   2,00,000

LESS: Deductin u/s 80C                                          1,00,000

TOTAL INCOME                                      :                   1,00,000

TAX ON TOTAL INCOME:

NORMAL RATES:          50000             =         NIL

SPECIAL RATES:          50000            =          20%

[THE BENIFIT OF CHAPTER VI-A DEDUCTION SHALL NOT BE GIVEN FROM LTCG [Sec.112(2)]. IT SHALL BE CHARGED NORMALLY. DEDUCTION SHALL BE FROM NORMAL INCOME i.e. 1,50,000/-. LTCG SHALL BE CHARGED AT SPECIAL RATES.]

HI,

I assume that it's for a.y.09-10 , 

gross total income(excl ltcg)     150000.

Less : 80c                                     100000( no deductions from ltcg are allowed)

net income (excl ltcg)                   50000

add : ltcg                                        50000

net taxable income                     100000

tax on income other than ltcg (i.e 50000)         Nil

as per sec 112, taxable ltcg ( ltcg (50000)- unexhausted exemption(150000-50000))  NIL

Tax liabilty                                               Nil

APOLOGY FOR THE ABOVE WRONG SOLUTION OF MINE...........

FROM THE NORMAL INCOME, FIRST DEDUCTIONS U/S 80C - 80U IS TO BE DEDUCTED AND THEN SUCH DIFFERECE UPTO NON-TAXABILITY LIMIT SHALL BE COMPENSATED BY CAP. GAINS AND THE BAL. OF CAP GAINS SHALL BE TAXABLE AT ITS SPECIAL RATES........

SOLUTIONS DONE DHARMESH AND LOVE IS RIGHT............\

SORY..........!!!!!!!!!!!!!!!!!!!!!

NO tax liability in this case.

No tax liability in this case .. as the deficiency of normal income will be set off by LTCG and after that there is no income, so no tax will be there ..

Regards

Varun Makhija

 No tax liability

no tax liability......