Query relating to Sec 88E and Sec 115JB

Tax queries 1543 views 3 replies

CA CS Akashdeep Singh

Practicing CA

1394 Points Joined June 2008

Sir

One of my client(X Ltd.) has a business income from taxable security transaction. Current issue is relating to Sec 115 JB and Sec 88E.

Facts

In Sec 115JB, if "tax on total income" is less than 10% of book profit, then 10% of book profit shall be treated as tax which he has to pay.

In Sec 88E, if any individual has a business income from taxable security transaction, STT paid by him is allowable as deduction from tax on total income

Issue

In Sec 115JB, which "tax on income" is taken to compare with 10% of book profit?

Solution: tax after or before deduction u/s 88E

Regards

Akashdeep Singh

Replies (3)

Pavan Jain S

Chartered Accountant

1575 Points Joined December 2008

Originally posted by :Akashdeep Singh
"	Sir One of my client(X Ltd.) has a business income from taxable security transaction. Current issue is relating to Sec 115 JB and Sec 88E. Facts In Sec 115JB, if "tax on total income" is less than 10% of book profit, then 10% of book profit shall be treated as tax which he has to pay. In Sec 88E, if any individual has a business income from taxable security transaction, STT paid by him is allowable as deduction from tax on total income Issue In Sec 115JB, which "tax on income" is taken to compare with 10% of book profit? Solution: tax after or before deduction u/s 88E Regards Akashdeep Singh	"

As per section 115JB, tax to be computed as per normal provisions of the Act shall be tax after rebate u/s 88E and tax credit u/s 86,90 & 91. Hence, its normal tax liability after rebate u/s 88E which must be compared with 10% of the Book profit