Tax

this 130000 is due to shifting ....

look.. there is special rate on long term i.e. 20% 

there is a concept of shifting of taxable income wch wl b implied here in this case

concept : when the total taxable income (after deductions) other than long term capital gain is less than the minimum limit of tax slab, then the difference of minimum limit and total taxable income other than LTCG will be shifted to LTCG and then this difference will be deducted from LTCG if any, the reason being the tax rate of both is differ.

in simple language ...jb LCTG ke bina wali income tax slab ki minimum limit se km hoti hai, to us diff ko LTCG me se deduct krke LTCG pe tax rate lgaya jata hai

thats y yahan minimum limit 200000 hai aur taxable income other than LTCG is 70000

200000 - 70000 = 130000

ab ye 130000 LTCG me se duct ho gya 

Mrs. X and she is aged about 70 years.

(a) Income under the head Salary `1,20,000

   (b)  Income under the head House Property `60,000

   (c) Long term capital gains `2,20,000

   (d) Short term capital gain under section 111A `1,10,000

   (e) Casual Income `90,000

   (f) Deduction under section 80C to 80U `2,00,000 .

SOLUTION:-

    Total Income                                                                                                                                       4,20,000

Computation of Tax Liability

Tax on LTCG (2,20,000 – 2,20,000) @ 20% u/s 112                                                                                   Nil

Tax on STCG `80,000 (1,10,000 – 30,000)  @ 15% u/s 111A                                                              12,000

Tax on Casual Income `90,000 @ 30% u/s 115BB                                                                              27,000

Tax on normal income at slab rate                                                                                                                Nil

Tax before education cess                                                                                                                       39,000

Add: Education cess @ 2%                                                                                                                         780

Add: SHEC @ 1%                                                                                                                                      390

Tax Liability                                                                                                                                            40,170

IN THIS CASE THERE IS DEDUCTION FROM STCG SAME CASE WILL BE APPLIED AS ABOVE LIMIT IS GOING TO CHANGE.

FOR 30,000

yes in the later case of mrs X aged 70 yrds the minimum limit is 250000 

the adjusment order is as LTCG then STCG ..as after adjusting all LTCG if any balance left then it will be adjusting agst STCG even after this any balance left then it will be adjustd agst casual income if any..

as u can see in solution.. thsi order has been applied

Hello all,

When there is an ever increasing need for more money in the paycheck, thoughts turn to ways to increase the number in the all-important 'Net Pay' box on your paycheck. If a raise is out of the question, the attention turns to all those deductions for federal withholding, social security, medicare and unemployment taxes. Sadly, there is no changing the percentages that are deducted from earnings for social security and medicare, those are fixed. There are a few ways to reduce the rest of the payroll taxes withheld, however.

Thanks a lot

Calvin Brave

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