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Short term capital gains on trading at nse, nse fo, mcx

vishal (student) (27 Points)

15 March 2013

Income from salary - 90000

Income from Online Trading- 75000 (Short Term Capital Gain)

Should assessee is liable to pay tax?

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5 Replies

VIKAS.A (SOMETHING IS BETTER THAN NOTHING) (1095 Points)
Replied 15 March 2013

DEFINETLY NOT LIABLE,

HE IS FREE FROM PAYING TAX,

MINIMUM INCOME FOR PAYING TAX IS 200000,

THE ASSESEE IS WITHIN THE LIMIT,

HENCE NOT LIABLE

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Giridhar S Karandikar (Team Lead) (7548 Points)
Replied 21 March 2013

Under Section 111A:

Short term capital gains arising on transfer of Equity Share or Units of an Equity Oriented Mutual Fund on satisfaction of the following conditions would be taxable @ 15% from AY 2009-10 onwards, whereas Income other than Short term Capital Gains of the assessee shall be taxed as per the Normal prevailing Slab Rates for specific assesses. The conditions whereof are:

The Transaction of sale of such equity share/ unit is entered into on or after October 1st’ 2004;
Such transaction is chargeable to Securities Transaction tax;
Such Equity shares are transferred through a Recognized Stock Exchange or sold to a Mutual Fund.
In any Other Case:

The Short term capital gains shall be computed after including same in Total Income and charging Tax as per assessee specific Slab Rates.

As you have generated STCG from Trading, so I think it would be taxable @ 15%. Other income would be exempt from tax.

VIKAS.A (SOMETHING IS BETTER THAN NOTHING) (1095 Points)
Replied 21 March 2013

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 t 15 per cent

. (2) Where the gross total income of an assessee includes any short-term capital gains referred to in sub-section (1), the deduction under Chapter VI-A shall be allowed from the gross total income as reduced by such capital gains.

(3) Where the total income of an assessee includes any short-term capital gains referred to in sub-section

(1), the rebate under section 88 shall be allowed from the income-tax on the total income as reduced by such capital gains. Explanation.For the purposes of this section, the expression equity oriented fund shall have the meaning assigned to it in the Explanation to clause (38) of section 10..

IF THE REMAINING INCOME EXCEPT UNDER STCG IS LESS THAN THE MINIMUM EXEMPTION THEN FOR THE REMAINING WE CAN DEDUCT WITH THE HELP OF STCG,

SAY- OTHER INCOME EXCEPT STCG=150000

FOR A.Y.12-13 STCG=60000

THE AMOUNT 200000-150000=50000

CAN BE DEDUCTED WITH THE HELP OF STCG AND THE REMAINING

10000 IS TAXABLE @ 15% HENCE I THINK ABOVE IS NOT TAXABLE.

CORRECT ME IF I AM WRONG,

THANK U

vishal (student) (27 Points)
Replied 22 March 2013

Thanks for the reply
But two Different answers confused me

Dhawal Mohnot (Practicing) (449 Points)
Replied 22 March 2013

As per Sec.111A, where the total income as reduced by STCG is below the maximum amount not chargeable to tax, then such STCG 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 tax and tax only on the balance of the STCG shall be computed at the specific rates.

Hence, since income from salary and STCG does not exceed basic exemption limit, you would not have to pay any tax