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Doubt: Short Term Cap Gain

24 May 2010

Suppose a person earns STCG on sale on shares. We know that LTCG on shares is exempt but STCG is not.

Now, the STCG is added to the other incomes of the person.

BUT, tax on STCG........is it needed to be paid even before 31st July? i.e whn the person files return for his income
Or, tax on STCG can be paid well along the tax on other Incomes.

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13 Replies

Shudhanshu Agrawal (Business) (2570 Points)
Replied 24 May 2010

Tax on STCG is calculated with the tax on other income and then we are able to know the total tax liability. Not only tax on STCG but total tax liability should be paid before filing return u/s 139.

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Balkrishna sharma (Tax and Audit Professional) (35 Points)
Replied 24 May 2010

Tax on STCG has to be taken into consideration when calculating your advance tax.

CA,CS, ICWA Inter MANOJ KEDIA (Working With Educomp) (99 Points)
Replied 25 May 2010

Yes it will Be considered in calculation of advance tax

so u have to pay with tax on other income also

Sunali (Learner) (1317 Points)
Replied 25 May 2010

Originally posted by : Suvarna Goel
	Suppose a person earns STCG on sale on shares. We know that LTCG on shares is exempt but STCG is not. Now, the STCG is added to the other incomes of the person. BUT, tax on STCG........is it needed to be paid even before 31st July? i.e whn the person files return for his income Or, tax on STCG can be paid well along the tax on other Incomes.

STCG is also treated in terms of income of person while calculating tax liability under IT Act and all other provisions apply accordingly.

The diiference lies in considering deductions from Gross total income as STCG can not be set off against deductions under differenct Chapters as provided in the Act.

DT Fundas - Tarun rustagi ( Author) (1150 Points)
Replied 25 May 2010

it will be included in the computation of advance tax liability and dear advance tax is also required to be paid before 31st march hance there is no connection with 31st july

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Shudhanshu Agrawal (Business) (2570 Points)
Replied 25 May 2010

Originally posted by : tarun rustagi
	it will be included in the computation of advance tax liability and dear advance tax is also required to be paid before 31st march hance there is no connection with 31st july

Dear we all know that advance tax has to be paid before 31st March u/s 208 of IT Act, 1961. But the orginal question is totally different.

Riyaz Khan (CA CS (Exec) MBA (Fin) Asst. General Manager-SEBI Internal Auditor-British Certifications Inc.) (1315 Points)
Replied 25 May 2010

I think the question is very simple that whether the tax on STCG have to pay before tax on other income.

And the answer is that, there is no such compulsion that you have to pay tax on STCG before your other tax. Even tax on STCG can be paid after July 31 along with tax on other income, If I'm not wrong.

I couldn't even understand, why are you people mixing it with Advance Tax.

Regards

R.D Khan

Shudhanshu Agrawal (Business) (2570 Points)
Replied 25 May 2010

I agree with you Mr. Khan. It does happen in many topic that the original question is lost.

Sumit Soni (Accounts & Taxation) (44 Points)
Replied 25 May 2010

Exactly.. answer is he need to pay tax on STCG with other income before due date only...

Sumit R Soni

Riyaz Khan (CA CS (Exec) MBA (Fin) Asst. General Manager-SEBI Internal Auditor-British Certifications Inc.) (1315 Points)
Replied 25 May 2010

Originally posted by : Sumit Soni
	Exactly.. answer is he need to pay tax on STCG with other income before due date only... Sumit R Soni

Dear Mr. Sumit, Now tell me where did you read that tax need to be paid before due date only.

Dear I think it can be paid even after due date also. :)

Answer to the question is that tax on STCG need not to be paid separately or before payment of tax on other income.

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DT Fundas - Tarun rustagi ( Author) (1150 Points)
Replied 25 May 2010

dear sudhanshu

i have submitted the reply in other way but my meaning is also same as u submitted.and u can understand my reply if u read it once again.my meaning is if u r paying advance tax then it's obivous that u r paying tax along with other income not only for stcg.

Shudhanshu Agrawal (Business) (2570 Points)
Replied 25 May 2010

Originally posted by : tarun rustagi
	dear sudhanshu i have submitted the reply in other way but my meaning is also same as u submitted.and u can understand my reply if u read it once again.my meaning is if u r paying advance tax then it's obivous that u r paying tax along with other income not only for stcg.

Dear Friend,

I understand your answer but the problem is not answer. The problem is that we make the simple question very complicated by giving such detailed answers. Now in situation also question is very simple but we made it typical by linking in with advance tax and other things.