Tax

 

Compute tax liability of ABC Ltd. a domestic company in the following situations:

(a) The company has long term capital gains of `200,00,000.

SOLUTION:-

 

Computation of Tax Liability

   Income under the head Capital Gains (long term capital gains)                                                      200,00,000

   Total Income                                                                                                                                    200,00,000

   Tax on `200,00,000 @ 20%                                                                                                              40,00,000

   Add: Surcharge @ 5%                                                                                                                         2,00,000

   Add: Education cess @ 2%                                                                                                                    84,000

   Add: SHEC @ 1%                                                                                                                                 42,000

   Tax Liability                                                                                                                                       43,26,000

__________________________________________________________________________________

 

 

Computation of Tax Liability

   Income under the head Capital Gains (long term capital gains)                                                      200,00,000

   Total Income                                                                                                                                    200,00,000

   Tax on `200,00,000 @ 20%                                                                                                              40,00,000

   Add: Surcharge @ 5%                                                                                                                         2,00,000

   Add: Education cess @ 2%                                                                                                                    80,000

   Add: SHEC @ 1%                                                                                                                                 40,000

   Tax Liability                                                                                                                                       43,20,000

 

From Above solutions I want to know which one is the correct answer.

So please help

Replies (1)

Dear Gauri, the first one is correct.  E.Cess & SHEC are to calculated on the Tax+Surcharge.

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