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Calculation of marginal relief

Aditya (Student) (61 Points)

01 February 2015

suppose if income from LTCG is 70 lacs and from normal income 32 lacs

thus,for calculation of marginal relief,can i take 100 lacs as LTCG and no normal income and get a high marginal relief?

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6 Replies

Ramit sharma (assistant) (52 Points)
Replied 01 February 2015

No, the normal income of assesse is computed under different head which are notified by Finance act (section 4 of IT act, 1961) The tax liability of an assesse is computed on slab basis for normal income and tax liability on LTCG is on standard rate @ 20% . Hence in the given case, the assesse cannot claim the entire amount of income as a LTCG.

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Aditya (Student) (61 Points)
Replied 01 February 2015

No,but for calculationof marginal relief,one has to compare the tax+surcharge with tax for a income of 100 lacs. So for this calculation,what amount of incomes should be taken in 100 lac amount.

Thanks

Ramit sharma (assistant) (52 Points)
Replied 01 February 2015

The total taxable income comes to 102 lacs(70+32) less deduction u/c VIA. So the tax liability Will be computed as under 1. First 2 lacs - nil 2. Next 3 lacs @ 10% = 30000 3. Next 5 lacs @ 20% = 100000 4. Remaining @ 30%= 660000 LTCG @ 20% = Rs. 1400000 Hence, total tax liability is Rs. 2190000 + SHEC @ 3%. Net tax liability shall be Rs. 2255700

Ramit sharma (assistant) (52 Points)
Replied 01 February 2015

In case of a company there is no minimum limit. Here, total taxable income is 102 lacs. Hence, marginal relief is not applicable in case of individual.