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Chinmay (Accounts Professional)     19 July 2010

Short term Capital Gain (Shares)

 

Hi Friends,

       I am working in Pvt. Ltd. Received salary per month. In addition I purchase some shares in Stock Exchange & sale it. In that transaction I have some profit after deducting brokerage on purchase & sale as well as STT. I attracts @ 20% flat rate tax.

        My question is what are the deductions to be allowed? 



 12 Replies

Shudhanshu Agrawal

Shudhanshu Agrawal (Business)     19 July 2010

Deduction in what context you want to know??whether related to Capital gain or overall??

Himanshu

Himanshu (Article Trainee)     19 July 2010

Dear Chinmay,

Greetings..............

In the case of Short Term Capital Gain( STCG) u will not elegible for any deduction, however your income will be exempted till basic exemption limit.

1 Like
Harpreet

Harpreet (* * * * * *)     19 July 2010

Capital gain tax rates
For short-term capital gains, you will be taxed depending on the tax slab relevant to you after you have added the capital gain to your annual income. But if the transaction was levied with Securities Transaction Tax (STT), your gain will be taxed 10%.

For long term capital gains, you will be taxed 20%. But if the transaction was levied with STT, you need not pay any tax on your gain. In case of long term capital gains, you can either calculate your capital gain using an indexed acquisition cost, or you can choose not to opt for indexing.

kushal

kushal (of)     20 July 2010

 

Friends it's very simple

STCG   (  STT paid)                       = 15%

STCG   ( STT Not paid)                = Taxed at Slab rate

LTCG   ( STT paid)                        =  Exempt u/s 10(38)

LTCG   ( STT Not paid)                = 1) If Actual cost claimed then taxed at 10%

                                                           2) If Indexed cost claimed then taxed at 20%

NARENDER PAWAR

NARENDER PAWAR (CA final Student)     20 July 2010

himanshu is right

 Somshekar (Rankholder)

Somshekar (Rankholder) (-)     20 July 2010

AGREED WITH KUSHAL.

YOU CANNOT CLAIM STT DEDUCTION. BUT ANY EXPENDITURE WHOLLY OR EXCLUSIVELY INCURRED WILL BE ALLOWED AS DEDUCTION SUCH AS BROKERAGE

OldSchool

OldSchool (None)     22 July 2010

Originally posted by : Harpreet

Capital gain tax rates
For short-term capital gains, you will be taxed depending on the tax slab relevant to you after you have added the capital gain to your annual income. But if the transaction was levied with Securities Transaction Tax (STT), your gain will be taxed 10%.

For long term capital gains, you will be taxed 20%. But if the transaction was levied with STT, you need not pay any tax on your gain. In case of long term capital gains, you can either calculate your capital gain using an indexed acquisition cost, or you can choose not to opt for indexing.

 


Can you please tell the source of this information. As far as I know, for FY 2009-2010,  tax on STCG(where STT has been paid) is 15% and not 10%

OldSchool

OldSchool (None)     22 July 2010

Originally posted by : Himanshu

Dear Chinmay,

Greetings..............

In the case of Short Term Capital Gain( STCG) u will not elegible for any deduction, however your income will be exempted till basic exemption limit.

 

The term 'income' includes Salary and the Short Term Capital Gains?

 

Which means if the salary plus short term capital gains for 2009-2010 is less than 1,60,000, one doesnt need to pay any tax?

 

Also, how does one calculate short term capital gains using indexation?

kushal

kushal (of)     25 July 2010

Any dam income(other than casual income), you can shift to basic exemption limit .

REMEMBER

In case suppose STCG(STT) is shifted to basic Ex. limit then balance STCG will b taxed at 10% instead of 15% , it is a ery cryptic provision in ACT, which many of us donot know .

EX:

Mr. A has STCG(STT)   = 3,00,000

Other income                 = 60,000

then after shifting STCG of 1,00,000 to Basic Ex. limit, remaining STCG will b taxed at 10% not 15% .

even many Return filling softwares take 15% .

OldSchool

OldSchool (None)     26 July 2010

Originally posted by : kushal

Any dam income(other than casual income), you can shift to basic exemption limit .

REMEMBER

In case suppose STCG(STT) is shifted to basic Ex. limit then balance STCG will b taxed at 10% instead of 15% , it is a ery cryptic provision in ACT, which many of us donot know .

EX:

Mr. A has STCG(STT)   = 3,00,000

Other income                 = 60,000

then after shifting STCG of 1,00,000 to Basic Ex. limit, remaining STCG will b taxed at 10% not 15% .

even many Return filling softwares take 15% .

 

Thanks. So, if the person has Other Income of let's say Rs. 1,50,000. STCG(STT) of Rs. 1,00,000. Then he would be taxed 10% on 90,000?

Can you clarify/give section where it says so. Where do we use 15% and where 10%?

kushal

kushal (of)     27 July 2010

Yes 90,000 will be taxed at 10% instead of 15% .

it is only possible when assessee have other income below ex. limit .

such provision is made to avoid cascading effect of tax .

you can refer to bare act section 111A .

pavan

pavan (Articled assistant)     29 July 2010

Hey Kushal,

 

that s very interesting man... still i cant believe the above provision..

How did u come to know abt d above thing...?

 

But its an extra-ordinary point....


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