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Short term capital gain (shares)

SumeetBPathak (B.Com) (33 Points)

14 July 2014

My wife is having some short term capital gain through selling of equities, will it be taxable? Considering her total income is not more than 2 lacks.
She is housewife and does have income through FD and sell of shares; will it be considered as business income for her?

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4 Replies

Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 14 July 2014

it is not business income, though intt on fd will be taxed under other sources, stcg will be taxed under capital gains....

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Anantha Subramanian (Student CA IPC / IPCC) (131 Points)
Replied 14 July 2014

generally short term capital gains on shares are taxable in slab rates.. if Securities Transaction Tax (STT) is paid then it attracts flats 15% tax on the short term capital gains.. so if STT paid then she have to pay 15% tax.. since she is housewife i think her income on short term cap gains will be clubbed in your hands and u need to pay tax for them.. this is wat act says.. anyway better get suggestions from those in taxation field too .....

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CA Keval desai (Transaction advisory service) (231 Points)
Replied 15 July 2014

Mr Sumeet,

you need to follow few instructions

1) Investment in shares by her own source of income or you have given her money for investment??

2) If you have given than , u have shown it as Gift/loan ?? ( purpose of clubbing provision)

3) i m assuming that STT must be paid and you must be having valid contract notes for the same.

4) If Clubbing provision will apply than Short term capital gain (STCG) will be clubbed in your total income and wil be taxed @ 15%.

5) If clubbing provisions will not apply than STCG will we taxed in her total income @ 15 %. she can also get slab benefit.

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Saurabh Maheshwari (B.com,ACA) (5923 Points)
Replied 15 July 2014

Assuming that she has purchased shares from her own money clubbing provisions shall not apply..

In such a case STCG shall be taxable @ 15%(even when Total Income doesnot exceed Rs2 lacs Basic exemp limit)...

However, a relief may be claimed in respect of such gain u/s 111A that if income excluding such STCG is less than Basic exemption limit , then STCG shall be reduced to the extent of difference b/w Basic exemp limit and Total inc(excluding STCG)...such remaining STCG shall be liable to tax @ 15% without any deduction under Chapter VIA..

In short , Taxable STCG may be calculated as under..

Short term cap gain	xxxxxx
less:(Basic exemp-Total income excluding STCG)...only when the total income excluding STCG is less than basic exemp limit	xxxx
Net taxable STCG @ 15% (without any further dedction under Chapter VIA)