111A. (1) Where the total income of an assessee includes any income chargeable under the head “Capital gains”, arising from the transfer of a short-term capital asset, being an equity share in a company or a unit of an equity oriented fund and—
(a) the transaction of sale of such equity share or unit is entered into on or after the date on which Chapter VII of the Finance (No. 2) Act, 2004 comes into force; and
(b) such transaction is chargeable to securities transaction tax under that Chapter,
the tax payable by the assessee on the total income shall be the aggregate of—
(i) the amount of income-tax calculated on such short-term capital gains at the rate of [fifteen] per cent; and
(ii) the amount of income-tax payable on the balance amount of the total income as if such balance amount were the total income of the assessee:
Provided that in the case of an individual or a Hindu undivided family, being a resident, where the total income as reduced by such short-term capital gains is below the maximum amount which is not chargeable to income-tax, then, such short-term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such short-term capital gains shall be computed at the rate of ten per cent.
If we going by the provision to the section then I think it would be like this:
Take STCG from shares u/s 111A of Rs. 10,00,000/-.
So if other income is below Rs. 160,000/- for male individuals say Rs. 159,000/- then tax on STCG u/s 111A will be at the rate of 10% as per the section.
and if other income is above Rs. 160,000/- for male individuals say Rs. 161,000/- then tax on STCG u/s 111A will be at the rate of 15% as per the section.
So this makes a weird interpretation of the section.
So I think the word “fifteen” should have been substituted for “ten” in the section and then read. However the same has not been done so what should be done?
Regards
CA Aditya Maheshwari
CAclubindia
