Nomula Sreenivasarao (DGM -Accounts) (163 Points)
21 April 2010Dear all,
My friend having salary income of 200000( after all deductions), he has also doing shares trading often(not daily basis). and he has no loss/profit from shares bussiness. He paid 2000/- as securities transaction tax in the whole year.
Cane he claim the STT. from salary income. Is there any exemption for STT from income. Please tell me.
Regards,
N.Sreenivaas
Ratan Deep Saxena
(Asstt Manager (Accounts & Finance))
(2998 Points)
Replied 21 April 2010
No STT can't be claimed as deduction with salary income.
regards,
ratan
Nomula Sreenivasarao
(DGM -Accounts)
(163 Points)
Replied 21 April 2010
Dear Ratan,
It can claim from shares bussiness income.
Ratan Deep Saxena
(Asstt Manager (Accounts & Finance))
(2998 Points)
Replied 21 April 2010
The income from share transaction can occur in following forms
1. Share trading
2. Speculative trade
3. F & O transactions
4. Capital Gains
Allowance of STT for First three types (1, 2 & 3)
From Assessment Year Asst Year 2009-10 (FY 2008-09 ) , Securities Transaction Tax (STT) is defined as an expense u/s 36(xv) of the I T Act
(xv) an amount equal to the securities transaction tax paid by the assessee in respect of the taxable securities transactions entered into in the course of his business during the previous year, if the income arising from such taxable securities transactions is included in the income computed under the head Profits and gains of business or profession.
Therefore , for share trading income, or speculative income, or Futures & Options trades , STT is an expense and deductible.
Can You Deduct STT from Capital Gains?
However , if you are selling the shares as investments , the STT can not be deducted as cost of acquisition . This is provided under the proviso to section 48 which is regarding cost of acquisition
Proviso to section 48
Provided also that no deduction shall be allowed in computing the income chargeable under the head Capital gains in respect of any sum paid on account of securities transaction tax under Chapter VII of the Finance (No. 2) Act, 2004
Thumb rule is that STT is cost for all kinds of transactions except capital gains.
regards,
ratan
manikandan.J
(Accounts Manager)
(363 Points)
Replied 21 April 2010
hi
mr.Ratan deep Classified perfectly about the STT
while you have the Daily basis did the share trading it is called intra-day trade it charged speculative business
CA VISHAL RANA,CS,B.Com,AMFI
(Chartered Accountant in Whole Time Practice)
(4354 Points)
Replied 21 April 2010
NO, STT CAN NOT BE ALLOWED AS DEDUCTION IN SALARY HEAD BECAUSE BUSINESS LOSS CAN,T BE SET OFF AGAINST SALARY INCOME
PULKIT KAPOOR
(CA )
(74 Points)
Replied 22 April 2010
no salary income cannot be set off against losses of business & profession..
CAclubindia
