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STCG In case of STT PAID

ERRIC (VP) (46 Points)

05 November 2009

If an ind/l (male) not a senior citizen, having STCG (u/s111A & he paid STT on Transaction to Stock exchange also( In case of Buying & Selling securities)) = Rs.1.2lac..

No other Source of Income.

only STCG =1.2lac

Is he liable to pay Tax under A.Y. 09-10.., If yes then How much?

One of My consultant says we cannot get relief on Below exemption limit

& also temme what kind of tax planning we can do to minimise Tax liability

I need ur reply on urgent basis, if u can guide in this matter

Thanks

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20 Replies

CA Sidhi Gaur (Chartered Accountant) (247 Points)
Replied 05 November 2009

wel..ur STCG is u/s 111A, so u hv to pay tax on it @ 15%.

Even if u hd any other income den also u cudnt club STCG wid them as only STCG other than u/s111A can be added wid other incomes..n for STT u cn claim deduction under business income now from AY2009-10.

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CA Namita Ganatra (Self) (70 Points)
Replied 05 November 2009

If he is just having STCG of Rs. 1.20 lacs and no other income then his income is lower than the exemption limit of Rs. 1.50 lacs determined for A.Y. 2009-10 hence he has no tax liability in A.Y. 2009-10. Further, you can go through the proviso to Sec. 111A which grants relief in such cases.

CA Sidhi Gaur (Chartered Accountant) (247 Points)
Replied 05 November 2009

Sir

if u want to do tax planning to minimise ur tax liability den go for LTCG on securities which is fully exempt from tax.

if u cn wait for 1 year n den sell ur securities ur income wud be tax exempt.

CA Sidhi Gaur (Chartered Accountant) (247 Points)
Replied 05 November 2009

But dear namita, STCG u/s 111A is taxable @ 15%. U cn refer d buk for dis purpose.

CA Namita Ganatra (Self) (70 Points)
Replied 05 November 2009

Hi Siddhi,

Please refer proviso to Sec. 111A which clearly specifies for relisef in such cases hence no tax liability for A.Y. 2009-10.

CA Namita Ganatra

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Juzer Sadikot (CA - innovative solutions for Imports and Exports) (1309 Points)
Replied 05 November 2009

Friends;

Both Sidhi and Namita is correct;

For Non - Residents, tax shall be charged @ 15.45 irrespective of Basic Exemption limit (maximum amount not chargeble to tax) and subject to DTAA

For Resident as per provisio to section 111A(1), it shall form part of total Income and tax shall not be charges upto amount of basic exemption limit (maximum amount not chargeble to tax)

Dear Erric, nw u have to decide taxability of STCG based on Residential status of your customer. In case he is tax resident in India, he can get benefit of basic exemption as rightly said by Namita.

Regards

Juzer

CA Namita Ganatra (Self) (70 Points)
Replied 05 November 2009

Hi Juzer,

In the entire discussion my assumption was that the assessee is resident definitely or else Eric would have specified.

CA Namita Ganatra

CA Trinath Galla (student) (3130 Points)
Replied 05 November 2009

ya if stcg is the only income and it is less than the applicable exemption limit, it is not taxable at all.

CA Trinath Galla (student) (3130 Points)
Replied 05 November 2009

that is for resident individuals and resident HUFs

CA Trinath Galla (student) (3130 Points)
Replied 05 November 2009

frns, my doubt is

deductions under sec; 80C to 80U are not available against LTCG.

are allowed against STCG(including STCG u/s;111A)??

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CA Namita Ganatra (Self) (70 Points)
Replied 05 November 2009

Deduction under section 80C to 80U is is not available in respect of long term capital gains and those short term capital gains which are taxable u/s. 111A.

Regards

CA Namita Ganatra

ERRIC (VP) (46 Points)
Replied 05 November 2009

First of all Thanks 2 all of them 4 paying attention...........

Ind/l is resident of India..

So Conclusion : He dont have any Tax liability and he enjoy relief of Basic exempn limit.......

He can show it in "income from capital gain" head and Is it compulsory 2 file return when its less than basic exempn limt i.e NIL return

Agree

(Guest)

Basically for all resident we have claim basic exemption for all source of income except "casual income". So even for STGC we can take benefit. But it comes after like this. First apply for income other than casual income, LTGC and STGC. Then apply for LTGC and if left apply for STGC.

With regards....

Sathya.......