C.A. ANKIT SINGHAL (CA PRACTICE) (52 Points)
13 September 2009please tell me about tax computation on long term capital gain on property, if assesee invest amount in 80c, and his other income is 150000, and 80c investment is 100000/- and long term capital gain is 50000/-. please tell me the formula of above tax calculation?
CA LOVELY ARORA
(C.A. B.Com (H) Graduate)
(2151 Points)
Replied 13 September 2009
if normal income of an assessee i.e. other than capital gain (both short term and long term), casual income (income from owing and maintaining race horses, gambling etc.) is more than exemption limit, then the amount of capital gain would attract tax on it. And also Deduction u/s 80C-80U will not be allowed from income other than normal income.
In this case, as normal income is rs. 150000 (assuming an individual assessee, man), deduction would be allowed equal to rs. 100000.
So, tax liability would be nil, as he would be allowed to charge deficieny i.e. rs. 100000 (Rs. 150000 being exemption limit - Rs. 50000 being amt. remained after claiming deduction) from Long Term Capital Gain i.e. Rs. 50000. So, after charging deficiency there would not be any income remains in his favour.
Ashish M
(Chartered Accountant)
(2731 Points)
Replied 14 September 2009
In the case above, computatoin will be like this.......(assuming resident individual)
OTHER INCOMES : 150000
LTCG : 50000
GROSS TOTAL INCOME : 2,00,000
LESS: Deductin u/s 80C 1,00,000
TOTAL INCOME : 1,00,000
TAX ON TOTAL INCOME:
NORMAL RATES: 50000 = NIL
SPECIAL RATES: 50000 = 20%
[THE BENIFIT OF CHAPTER VI-A DEDUCTION SHALL NOT BE GIVEN FROM LTCG [Sec.112(2)]. IT SHALL BE CHARGED NORMALLY. DEDUCTION SHALL BE FROM NORMAL INCOME i.e. 1,50,000/-. LTCG SHALL BE CHARGED AT SPECIAL RATES.]
Dharmesh k. Dubey
(Student)
(188 Points)
Replied 14 September 2009
HI,
I assume that it's for a.y.09-10 ,
gross total income(excl ltcg) 150000.
Less : 80c 100000( no deductions from ltcg are allowed)
net income (excl ltcg) 50000
add : ltcg 50000
net taxable income 100000
tax on income other than ltcg (i.e 50000) Nil
as per sec 112, taxable ltcg ( ltcg (50000)- unexhausted exemption(150000-50000)) NIL
Tax liabilty Nil
Ashish M
(Chartered Accountant)
(2731 Points)
Replied 14 September 2009
APOLOGY FOR THE ABOVE WRONG SOLUTION OF MINE...........
FROM THE NORMAL INCOME, FIRST DEDUCTIONS U/S 80C - 80U IS TO BE DEDUCTED AND THEN SUCH DIFFERECE UPTO NON-TAXABILITY LIMIT SHALL BE COMPENSATED BY CAP. GAINS AND THE BAL. OF CAP GAINS SHALL BE TAXABLE AT ITS SPECIAL RATES........
SOLUTIONS DONE DHARMESH AND LOVE IS RIGHT............\
SORY..........!!!!!!!!!!!!!!!!!!!!!
Aditya Maheshwari
(CA in Practice)
(35867 Points)
Replied 14 September 2009
NO tax liability in this case.
VARUN
(PCC STUDENT)
(523 Points)
Replied 15 September 2009
No tax liability in this case .. as the deficiency of normal income will be set off by LTCG and after that there is no income, so no tax will be there ..
Regards
Varun Makhija
CA Mohit Thareja
(Assistant Manager-Accounts & Finance)
(1117 Points)
Replied 15 January 2011
no tax liability......
CAclubindia
