Provided that in the case of an individual or a Hindu undivided family, being a resident, where the total income as reduced by such short-term capital gains is below the maximum amount which is not chargeable to income-tax, then, such short-term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such short-term capital gains shall be computed at the rate of ten per cent.
For exampe. An individual having having total income of Rs.2,00,000 which includes Business income of Rs.50,000 and STCG u/s-111A being Rs.1,50,000. Hance while computing his total tax laibility, for basic exemption of Rs.1,60,000 first business income of Rs.50,000 is set-off and for balancing exemption of Rs.1,10,000, STCG u/s-111A is shifted.
And for balancing STCG-U/s-111A of amounting Rs.40,000 (1,50,000-1,10,000) Tax is lavied at the rate of 10% and not at the rate of 15%.
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