Give me the detailed step by step procedure for computation of Income Tax for a Pvt. Ltd. Co. where the following are involved:
- Income from Main Line of Business
- Short Term Capital Gain from investment in Equity Mutual Funds
- Short Term Capital Gain from investment in Debt Mutual Funds
Can investment in Mutual Funds be treated as another line of business ?
Dear Sir,
I am not sure what procedure you want in computation. But Tax rate will be as follows(If u meant something else then pls clarify)
Income from main line of business (other then shares/MFs) - Taxable @ 30%
Income from Short Term Gain - Equity MF - Taxable @ 15%
Income from Short Term Gain - Debt MF - Taxable @ 30%
Yes, MF Transactions can be treated as Business if Company is a Trader & not an Investor. Further Business shall not be treated as Speculative since Explanation to Sec 73 applies only to Shares & not in case of Units of MF.
If Mutual Fund income is treated as Business Income will the Tax Computation change ? At what rate ?
If main business is consultancy & short term investment in MF is side business, will it be considered as trading for tax purposes ? Is additional permission is required from RBI or SEBI to do trading ?
Dear Sir,
No separate permission from SEBI/RBI is required to do trading in MFs.
Second whether it will be treated as Business or Capital Gain, answer to this lies with u I mean assesee the way he wants to treat..
If it is treated as Side Business and not as Investment then entire Income of Pvt. Co. will be taxable @ 30%...
Consider the following case :
Income from Main Line = 10,000
Income from Equity MF = 20,000
Income from Debt MF = 2,000
If I treat all of the above as business income then,
Tax = (32000*0.3)
Is this correct ?
CAclubindia
