Tax

Problem 

Mr. Tarun Gulati submits the particulars for the previous year 2012-13 as given below:

   1.   He has received a gift of `27,000 from one of his friend on 01.09.2012.

   2.   He has received a gift of `11,000 on 01.10.2012 from his wife Mrs. Tanya Gulati.

   3.   He has received a gift of `29,000 from his step daughter on 01.01.2013.

   4.   He has received a gift of `27,000 from grand mother of Mrs. Tanya Gulati on 07.01.2013.

   5.   He has received a gift of `20,000 in kind from his employer on 01.03.2013.

   6.   He has received gold as gift from his friend on 01.12.2012 with value `2,00,000.

   7.   He has received `27,000 as gift from his maternal aunt (mother’s sister) on 10.12.2012.

   8.   He has received dividend of `2,00,000 from a domestic company on 31.03.2013.

   9.   He has received two gifts of `30,000 each from his neighbours on 01.06.2012.

Compute his tax liability for assessment year 2013-14.

SOLUTION:-

                                                                                                                                                      `

Computation of income under the head Salary

Gift in kind from his employer (20,000 – 5,000)                                                                                  15,000.00

Income under the head Salary                                                                                                                          15,000.00

Computation of income under the head Other Sources

Gift received from friend                                                                                                                     27,000.00

Gifts received from neighbours                                                                                                            60,000.00

Gift received from friend in kind                                                                                                      2,00,000.00

Income under the head Other Sources                                                                                              2,87,000.00

Gross Total Income                                                                                                                            3,02,000.00

Less: Deduction u/s 80C to 80U                                                                                                                     Nil

Total Income                                                                                                                                      3,02,000.00

Computation of tax liability

Tax on `3,02,000 at slab rate                                                                                                                10,200.00

Add: Education cess @ 2%                                                                                                                       204.00

Add: SHEC @ 1%                                                                                                                                    102.00

Tax Liability                                                                                                                                          10,506.00

Rounded off u/s 288B                                                                                                                                      10,510.00

Note: Dividend received by Mr. Tarun Gulati from domestic company is exempt u/s 10(34).

In the above solution why we have deducted this 5000 and how 5000 has been calculated and gift is not considered as income so why he is calculating tax on 302000 according to the slab rate.It should considered as short term capital gain and according to it short term capital gain @ 15%...so we should calculate 15%.

Please help.