Fire your tax related queries and i would get it solved!!!

[raja1344]

did you keep the photocopy of the scrip when held in non-demat form ??

In a nutshell you should have some proof with you to prove that you held the shares for the long term

hi diosys
good morning.i've the photo copy of original share certificate.is that will be enough to prove it as long term?
Thanks
Raja

 

[diosys]

hi diosys
good morning.i've the photo copy of original share certificate.is that will be enough to prove it as long term?
Thanks
Raja

that should suffice if it mentions a date anywhere....

 

[melvyn13]

Hi diosys

I have been going through ur thread, you are doing a great job of clarifying tax related queries.

My query is that,

I have been trading in equity(delivery type) and have a profit of 1,20,000

1. Do i file this profit under short term capital gain or business income? Which will give me less tax to pay? how much do i need to pay?

2. Are the exemptions like computer depreciation, internet charges,etc.. available for capital gains?

 

[diosys]

Hi diosys

I have been going through ur thread, you are doing a great job of clarifying tax related queries.

My query is that,

I have been trading in equity(delivery type) and have a profit of 1,20,000

1. Do i file this profit under short term capital gain or business income? Which will give me less tax to pay? how much do i need to pay?

2. Are the exemptions like computer depreciation, internet charges,etc.. available for capital gains?

If you have done purely delivery then file your income under capital gains and the tax payable by you would be 15% on the net income...

The deductions asked by you are not available under capital gain....You can deduct the brokerage and taxes paid while computing the profit under capital gains.

 

[melvyn13]

If you have done purely delivery then file your income under capital gains and the tax payable by you would be 15% on the net income...

The deductions asked by you are not available under capital gain....You can deduct the brokerage and taxes paid while computing the profit under capital gains.

Thanks a lot for ur prompt reply...
I just wanted to know,
1.when do we file under "Business Income" and what percentage do we have to pay tax?
2. For paying STCG tax online, i need to fill Challan ITNS - 280 . But what option do i select, self assesment tax or advance tax?

 

[diosys]

Thanks a lot for ur prompt reply...
I just wanted to know,
1.when do we file under "Business Income" and what percentage do we have to pay tax?
2. For paying STCG tax online, i need to fill Challan ITNS - 280 . But what option do i select, self assesment tax or advance tax?

Business income is calculated as per your income slab. There is no fixed rate of tax on it.

If you are paying tax for the FY 2008-09 then it would be self assessment. If for 2009-10 then it would be advance tax.

 

[pmg123]

Hi Diosys,

Have seen your post, you have helping members much since 2007, thanks very much for the same.

My query is as follows: Bought residential site for 75,000/- in Mar'05 and now Jan' 10 selling for 2,40,000/- qualifies for "Long Term Capital Gain Tax" (LTCGT) since site bought more than 3 years. As per IT act, the calculation is as follows:

Capital Gain = ( Full value of consideration received or accrued on transfer of capital asset) - ( Cost of acquisition of capital assets + Cost of improvement of capital assets + Expenditure incurred wholly and exclusively in connection with the transfer of capital asset such as stamp duty, registration charges, legal fees, brokerage etc.)

Full value of consideration received = 2,40,000/-

Cost of acquisition = 75,000*632 (Cost Inflation Index for 2009-10) / 480 (Cost Inflation Index for 2004-05) = 98,750/-.

Expenditure incurred towards registration, stamp duty etc.. = 10,000/-

Capital Gain = 2,40,000 - ( 98,750 + 10,000 ) = 1,31,250/-.

LTCG Tax = 26,250/- ( 20% of CG )

Please confirm if the above is correct??

Now comes the clarifications:

1. I have taken Bank loan for acquiring the site,, question is can I set off the loan interest component against the CG ??
2. I have paid property tax for 5+ years for the site,, question is can I set off this tax component against the CG??
3. I have paid extra amount towards legal charges, Khata transfer, misc...,,, question is can I set off these amounts against the CG??

Thanks in anticipation.

 

[diosys]

Hi Diosys,

Have seen your post, you have helping members much since 2007, thanks very much for the same.

My query is as follows: Bought residential site for 75,000/- in Mar'05 and now Jan' 10 selling for 2,40,000/- qualifies for "Long Term Capital Gain Tax" (LTCGT) since site bought more than 3 years. As per IT act, the calculation is as follows:

Capital Gain = ( Full value of consideration received or accrued on transfer of capital asset) - ( Cost of acquisition of capital assets + Cost of improvement of capital assets + Expenditure incurred wholly and exclusively in connection with the transfer of capital asset such as stamp duty, registration charges, legal fees, brokerage etc.)

Full value of consideration received = 2,40,000/-

Cost of acquisition = 75,000*632 (Cost Inflation Index for 2009-10) / 480 (Cost Inflation Index for 2004-05) = 98,750/-.

Expenditure incurred towards registration, stamp duty etc.. = 10,000/-

Capital Gain = 2,40,000 - ( 98,750 + 10,000 ) = 1,31,250/-.

LTCG Tax = 26,250/- ( 20% of CG )

Please confirm if the above is correct??

Now comes the clarifications:

1. I have taken Bank loan for acquiring the site,, question is can I set off the loan interest component against the CG ??
2. I have paid property tax for 5+ years for the site,, question is can I set off this tax component against the CG??
3. I have paid extra amount towards legal charges, Khata transfer, misc...,,, question is can I set off these amounts against the CG??

Thanks in anticipation.

Hi,

There is one problem with the calculation. The brokerahe paid during purchase would also be indexed along with the basic cost. Hence your tax liability would also be slightly reduced.

Now for your questions.

1.) Bank interest can be added to the purchase cost though you would need to prove (in case called for) that each and every rupee of the samctioned loan was used for the land accquisatoin only.

2.) Property tax is not allowed as a deduction as it is not for the property. It is incidental to the property purchased.

3.) These cost is directly relateable to your sale then can be deducted from the final sale consideration.

 

[pmg123]

Hi Diosys,

Thanks a ton for the quick response. :clapping:

Please clarify for all tax calculation purposes the value what ever mentioned in the "Sale Deed" is what is taken.

Since both the values I mentioned 75,000/- (Cost of Acquiring) as well as 2,40,000/- (Cost of Sale) are values mentioned in the Sale Deed.

Whereas the actual cost of acquiring as well as the cost of sale is different, wanted to know if this will impact our tax calculation in any way, though as per me ideally it should not, please clarify.

Thanks in anticipation.


Best Regards

 

[pmg123]

Hi Diosys,

Also happen to read in your post #758 of this thread lazytrader has mentioned CG Tax not applicable for Land purchased outside 8Km City limit. Which govt authority will be able to clearly state this? since the land in question is 20+ kms from the Blr City station.

Can you please elaborate on this further??

Thanks