shruti (.) (240 Points)
10 February 2014PLS HELP ME
I WAS BOUGHT SHARE FROM MY COMPANY UNDER ESOP OPTION FOR RS 75000/-
AND SELL THE SHARE TO THE COMPANY UNDER BUYBACK FOR RS. 2100000/-
CAPITAL GAIN IS LONG TERM CAPITAL GAIN AND WITH OUT SECURITY TRANSACTION TAX
SALE TRANSACTION IS COMPLETED IN MARCH 2013
PLS REPLY HOW MUCH TAX IS PAYABLE ON THE ABOVE CAPITAL GAIN.
I AM CONFUSED WHETHER 20% OR 10% TAX . PLS SUGGEST.
Ankit
(CA, CS)
(3064 Points)
Replied 10 February 2014
Dear Shruti,
If the shares are given back to the company under buy back, the whold of the gain is exempt under section 10(34A) of the Act, which is newly inserted by the Finance Act, 2013.
Hence, you need not pay any tax on the gain. Just declare the amount under exempt incomes in the Return of Income that you will be filing.
If you have any more queries, feel free to ask..
CA Pooja Sharma
(Chartered Accountant)
(192 Points)
Replied 10 February 2014
Yes, There is no need to pay tax in the above situation as per Section 10 (34A) of the act which may be summarized as follows:
W.e.f. 1.6.2013, the domestic company shall be liable to pay additional income tax @ 20% (plus surcharge + cess) on any amount of distributed income paid by the company on buy back of shares as per Section 115QA.
Since, the company has to pay additional income-tax on buy back of shares, any income arising to an assessee, being a shareholder, on account of buy back of shares (not being listed on recognised stock exchange), shall be exempt.
shruti
(.)
(240 Points)
Replied 10 February 2014
shruti
(.)
(240 Points)
Replied 10 February 2014
Rahul jain
(LEARNING & TEACHING)
(435 Points)
Replied 13 February 2014
<h2 justify;\"="" style="border: 0px; font-family: 'Open Sans', 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 1.4em; font-weight: inherit; margin: 0px 0px 0.8125em; outline: 0px; padding: 0px; vertical-align: baseline; clear: both; color: rgb(0, 0, 0); line-height: 2.6;">no u cannot pay tax @ 10%....if the STT paid then in long term the whole gain is exempt and in short term it will be taxed @ 15%.....
if STT not paid then LTCG shall be taxable at 20%. In addition to this, surcharge, if applicable, as well as education cess will have to be applied.
PREM kasi
(Internal audit)
(69 Points)
Replied 04 July 2014
sir, will it make any difference in calculating tax liability if any STT have been paid ????
Ramanuj
(Accountant.)
(834 Points)
Replied 04 July 2014
I think you have paid 20 % tax of capital gain income.
CAclubindia
