Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

Short term Capital Gain (Shares)

Chinmay (Accounts Professional) (356 Points)

19 July 2010

Hi Friends,

I am working in Pvt. Ltd. Received salary per month. In addition I purchase some shares in Stock Exchange & sale it. In that transaction I have some profit after deducting brokerage on purchase & sale as well as STT. I attracts @ 20% flat rate tax.

My question is what are the deductions to be allowed?

Reply
Follow
Share

12 Replies

Shudhanshu Agrawal (Business) (2570 Points)
Replied 19 July 2010

Deduction in what context you want to know??whether related to Capital gain or overall??

Upgrade to CAclubindia Pro. Subscribe Now!

Himanshu (Article Trainee) (97 Points)
Replied 19 July 2010

Dear Chinmay,

Greetings..............

In the case of Short Term Capital Gain( STCG) u will not elegible for any deduction, however your income will be exempted till basic exemption limit.

1 Like

Harpreet (* * * * * *) (1670 Points)
Replied 19 July 2010

Capital gain tax rates
For short-term capital gains, you will be taxed depending on the tax slab relevant to you after you have added the capital gain to your annual income. But if the transaction was levied with Securities Transaction Tax (STT), your gain will be taxed 10%.

For long term capital gains, you will be taxed 20%. But if the transaction was levied with STT, you need not pay any tax on your gain. In case of long term capital gains, you can either calculate your capital gain using an indexed acquisition cost, or you can choose not to opt for indexing.

kushal (of) (37 Points)
Replied 20 July 2010

Friends it's very simple

STCG ( STT paid) = 15%

STCG ( STT Not paid) = Taxed at Slab rate

LTCG ( STT paid) = Exempt u/s 10(38)

LTCG ( STT Not paid) = 1) If Actual cost claimed then taxed at 10%

2) If Indexed cost claimed then taxed at 20%

NARENDER PAWAR (CA final Student) (337 Points)
Replied 20 July 2010

himanshu is right

Upgrade to CAclubindia Pro. Subscribe Now!

Somshekar (Rankholder) (-) (158 Points)
Replied 20 July 2010

AGREED WITH KUSHAL.

YOU CANNOT CLAIM STT DEDUCTION. BUT ANY EXPENDITURE WHOLLY OR EXCLUSIVELY INCURRED WILL BE ALLOWED AS DEDUCTION SUCH AS BROKERAGE

OldSchool (None) (50 Points)
Replied 22 July 2010

Originally posted by : Harpreet
	Capital gain tax rates For short-term capital gains, you will be taxed depending on the tax slab relevant to you after you have added the capital gain to your annual income. But if the transaction was levied with Securities Transaction Tax (STT), your gain will be taxed 10%. For long term capital gains, you will be taxed 20%. But if the transaction was levied with STT, you need not pay any tax on your gain. In case of long term capital gains, you can either calculate your capital gain using an indexed acquisition cost, or you can choose not to opt for indexing.

Can you please tell the source of this information. As far as I know, for FY 2009-2010, tax on STCG(where STT has been paid) is 15% and not 10%

OldSchool (None) (50 Points)
Replied 22 July 2010

Originally posted by : Himanshu
	Dear Chinmay, Greetings.............. In the case of Short Term Capital Gain( STCG) u will not elegible for any deduction, however your income will be exempted till basic exemption limit.

The term 'income' includes Salary and the Short Term Capital Gains?

Which means if the salary plus short term capital gains for 2009-2010 is less than 1,60,000, one doesnt need to pay any tax?

Also, how does one calculate short term capital gains using indexation?

kushal (of) (37 Points)
Replied 25 July 2010

Any dam income(other than casual income), you can shift to basic exemption limit .

REMEMBER

In case suppose STCG(STT) is shifted to basic Ex. limit then balance STCG will b taxed at 10% instead of 15% , it is a ery cryptic provision in ACT, which many of us donot know .

EX:

Mr. A has STCG(STT) = 3,00,000

Other income = 60,000

then after shifting STCG of 1,00,000 to Basic Ex. limit, remaining STCG will b taxed at 10% not 15% .

even many Return filling softwares take 15% .

OldSchool (None) (50 Points)
Replied 26 July 2010

Originally posted by : kushal
	Any dam income(other than casual income), you can shift to basic exemption limit . REMEMBER In case suppose STCG(STT) is shifted to basic Ex. limit then balance STCG will b taxed at 10% instead of 15% , it is a ery cryptic provision in ACT, which many of us donot know . EX: Mr. A has STCG(STT) = 3,00,000 Other income = 60,000 then after shifting STCG of 1,00,000 to Basic Ex. limit, remaining STCG will b taxed at 10% not 15% . even many Return filling softwares take 15% .