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

[Nishit_]

35000 without 80C deduction

Hello,

I didn't get how you calculated it ? Can you please explain how you calculated 35K Income TAX for income of 3lk from salary & 2 lk from Derivative market trading (stock futures) not intraday.

Thank you once again.

Nishit.

 

[diosys]

Some questions regarding ESOP not listed in India.

1. Allotment date - Some say that this is the day when the Company/Board decided to give you shares and some say this is the date when you are added as shareholder of that share in company books i.e. the date you get the stock in the DMAT.

2. Stocks vested/alloted before april 1 2009 but exercised after april 1 2009. The stocks vested before 2009 were subject to FBT and stocks exercised after april 1 2009 are subject taxed as perquisite in hands of employee.

3. What are the implications of currency conversion losses/gains? i.e the day I exercise, i get say 2000$, and the company is TDSing with some exchange rate say 50 INR=1$ and charge me 30000+cess. But by the time i transfer the conversion charge goes down to 49? goes up to 51?

1.) Allotment date - means the date on which the board of directors pass the necessary resolution for making the allotment

2.) This new law shall apply only in cases where the allotment or transfer of shares is made on or after April 1, 2009. In other words, if allotment is made prior to that date, the same continues to attract FBT. So, what is important is not the date of announcement or date of grant or date of vesting or date of exercising the option but the date of allotment or transfer of shares/securities to employees. If shares are allotted or transferred on or after April 1, 2009, the same will be taxed as perquisite in employees hands. This is even applicable if the option is vested with the employee or the option is granted or exercised before April 1, 2009.

3.) If i understand your question correctly then your purchase price gets frozen upon conversion...so how would currency fluctuations matter ?

 

[diosys]

Hello,

Thanks . I guess it is like this.
3lk + 2Lk = 5 LK
0-1.5lk = 0 Tax free.
1.5lk-3lk = 1.5lk -- > 15k tax
2lk = earned from market 20 K ?

I heard that income from derivative market is considered as bussiness income then how only 10% Tax will charge on this ?

Regards,
Nishit..

You are getting the notion wrong though the calculation is correct to a certain extent...

Lets change the eg... You earn 6 lacs salary and 3 lac derivative income.

0-1.5 - no tax
1.5-3 - 15K tax
3-5 - 20K tax
5 above (@30%) - 120K tax

total tax outgo 155K

i have been saying this soooooooooooooooooooooo many times here that for individuals it does not matter to be derivative income / business income....your income would always be taxable as a whole and not part by part..

Add your total income and pay tax according to your slab irrespective of your income source except the income from capital gains which is taxable at certain concessional rate...

THAT is all... there is NO FLAT RATE OF TAX IN BUSINESS INCOME FOR INDIVIDUALS !!!

 

[Nishit_]

Hi,

Thank for the clarification (your income would always be taxable as a whole and not part by part..).

Sorry to bother you again I was confused because of this

0-1.5 - no tax
1.5-3 - 15K tax (@10%)
3-5 - 20K tax (@10%) ??? or 20% if it is 10% then why 1.5 to 3 have separate slab why it is not 1.5 to 5 ?
5 above (@30%) - 120K tax

Regards,
Nishit.

 

[magnet]

only correction i guess is its 1.6 l from where tax applies not 1.5 l

 

[diosys]

Hi,

Thank for the clarification (your income would always be taxable as a whole and not part by part..).

Sorry to bother you again I was confused because of this

0-1.5 - no tax
1.5-3 - 15K tax (@10%)
3-5 - 20K tax (@10%) ??? or 20% if it is 10% then why 1.5 to 3 have separate slab why it is not 1.5 to 5 ?
5 above (@30%) - 120K tax

Regards,
Nishit.

It is 20% for the slab

 

[supertrader06]

Hi Diosys,

I do Intraday Trading in Futures and Options.
Will it be Business income or Speculation income

Regards,
Supertrader

 

[diosys]

Hi Diosys,

I do Intraday Trading in Futures and Options.
Will it be Business income or Speculation income

Regards,
Supertrader

business income

 

[magnet]

Sir i am back with my silly doubts and again its related to TDS..lol

Well i was calculating tax on a sum of 3.5 lakh amount which is kept on 5.5% yearly interest

So the yearly interest is 19250...Since it surpasses 10000 limit TDS applies..
Just for sake of simplicity in calculation lets apply only 10% rate( i know its 10.3%)

So 1925 is deducted from interest and 17325(4.95% return on principal) is the yearly
interest

Now here my doubt starts

Lets say we apply this on 3 people A , B ,and C who fall under 10%,20% and 30% tax limits respectively (where this interest income is the income from other source added to their normal income and adding this amount they dont cross into another tax limits like 10% goes to 20% or 20% into 30%)

Do correct me if i am wrong

For A since the TDS has already been applied with 10% rate no further 10% on this income is applied so 17325 added to gross and no further tax paid since TDS has taken the liability else it would be double taxation

For B since the guy falls under 20% limit a further deduction of 10% is applied on 17325 amount(not 19250) and that amount i.e 15592 becomes his income

For C since the guy falls 30% limit 20% furthur amount deducted from 17325 and 13859 becomes the income with all tax deducted


Am i correct sir in my example?

 

[diosys]

Sir i am back with my silly doubts and again its related to TDS..lol

Well i was calculating tax on a sum of 3.5 lakh amount which is kept on 5.5% yearly interest

So the yearly interest is 19250...Since it surpasses 10000 limit TDS applies..
Just for sake of simplicity in calculation lets apply only 10% rate( i know its 10.3%)

So 1925 is deducted from interest and 17325(4.95% return on principal) is the yearly
interest

Now here my doubt starts

Lets say we apply this on 3 people A , B ,and C who fall under 10%,20% and 30% tax limits respectively (where this interest income is the income from other source added to their normal income and adding this amount they dont cross into another tax limits like 10% goes to 20% or 20% into 30%)

Do correct me if i am wrong

For A since the TDS has already been applied with 10% rate no further 10% on this income is applied so 17325 added to gross and no further tax paid since TDS has taken the liability else it would be double taxation

For B since the guy falls under 20% limit a further deduction of 10% is applied on 17325 amount(not 19250) and that amount i.e 15592 becomes his income

For C since the guy falls 30% limit 20% furthur amount deducted from 17325 and 13859 becomes the income with all tax deducted


Am i correct sir in my example?

Unfortunately Wrong, Wrong, Wrong

It is not to be done in this manner.... See the example below

Income - 4.9 Lacs; Intt Income - 20 K; Total Income - 5.1; TDS - 2K

His total tax payable (gross) would be
1.6 - 3 - 14K
3 - 5 - 40K
5 - 5.1 - 3K

Thus total tax liability would be Rs. 57K. Now out of this 57K 2K has already been deducted and paid as TDS hence he would need to pay the difference of Rs. 55K.

SIMPLE !!!