Income tax clarification for short term capital gain

Discussion in 'Taxation Matters' started by record, Jul 15, 2011.

  1. record

    record New Member

    Joined:
    Jan 12, 2011
    Messages:
    17
    Likes Received:
    4
    Trophy Points:
    3
    I am paying income tax at 30% tax slab. I am also trading in NSE share market and paid STT service transaction tax, brokerage,stamp duty and other charges.

    I have following income tax clarification. Could you please clarify my queries?

    1) I have received 1:1 equity bonus shares. Actually it is split of actual shares. Share value become after issuing bonus.
    Example : XYZ company issues 1:1 equity bonus shares. Before bonus share value was Rs. 210/each after bonuse amount become Rs. 105/each
    Is this amount is taxable? What is the percentage of tax.

    2) I have received dividend for equity shares. Is the dividend amount taxable? What is the percentage of tax?

    3) I bought some share with some rate and sold less rate in FY 2010-11. Example bought 100 for 80/each and sold 100 for 60/each.
    Means 8000-6000 = 2000 loss. Is it possible to substract 2000 from my taxable income (I am in 30% tax slab)

    4) I bought some share with some rate and due to less current market price I did not sell same financial year, ie FY 2010-11 and kept in my demat account.
    Example bought 100 for 80/each = 8000. Is it possible to substract 8000 from my taxable income?

    5) I have also paid following charges
    Brokerage charges
    Transaction charges
    Security Transaction Tax (STT)
    Education Cess(2%)
    Higher Education Cess(1%)
    Stamp Duty
    Demat charges for IL&FS & NSDL
    Internet charges
    Share buy/Sell tips subscription charges

    Is it possible to subtract all the above charges from my taxable income?

    6) What is short term capital gain income tax % for FY 2010-11?

    Thanks in advance
     
  2. anuragmunjal

    anuragmunjal Well-Known Member

    Joined:
    Jul 7, 2009
    Messages:
    696
    Likes Received:
    1,168
    Trophy Points:
    93
    hi
    I shall try n answer ur queries to the best of my knowledge..but I am no CA, therefore consult your CA before taking any final desicion.

    1) I have received 1:1 equity bonus shares. Actually it is split of actual shares. Share value become after issuing bonus.
    Example : XYZ company issues 1:1 equity bonus shares. Before bonus share value was Rs. 210/each after bonuse amount become Rs. 105/each
    Is this amount is taxable? What is the percentage of tax


    The cost of bonus shares is considered 0, if u sell them off within 1 year, u will have to pay Short term CG tax, if sale is after one year , u can avail LT cap gain benefit.

    2) I have received dividend for equity shares. Is the dividend amount taxable? What is the percentage of tax?

    the dividend that u receive is not taxable.

    3) I bought some share with some rate and sold less rate in FY 2010-11. Example bought 100 for 80/each and sold 100 for 60/each.
    Means 8000-6000 = 2000 loss. Is it possible to substract 2000 from my taxable income (I am in 30% tax slab)


    u cannot subtract this loss against ur other taxable income, but you can offset it against a short term profit.

    4) I bought some share with some rate and due to less current market price I did not sell same financial year, ie FY 2010-11 and kept in my demat account.
    Example bought 100 for 80/each = 8000. Is it possible to substract 8000 from my taxable income?


    no u cannot subtract this amount frm ur taxable income.

    5) I have also paid following charges
    Brokerage charges
    Transaction charges
    Security Transaction Tax (STT)
    Education Cess(2%)
    Higher Education Cess(1%)
    Stamp Duty
    Demat charges for IL&FS & NSDL
    Internet charges
    Share buy/Sell tips subscription charges

    Is it possible to subtract all the above charges from my taxable income?


    no u can not subtract these charges frm ur taxable income.
    the last 3 charges ie. demat, internet & subscription can be adjusted if u show ur profits in stock trading as 'business income' and pay tax accordingly and not if u are availing ST or LT capital gain.

    6) What is short term capital gain income tax % for FY 2010-11?
    15%

    regards
     
    record, krishna324 and bestnifty like this.
  3. bestnifty

    bestnifty Active Member

    Joined:
    Aug 15, 2010
    Messages:
    106
    Likes Received:
    38
    Trophy Points:
    28
    daytrading

    Dear Anuragmunjal ,
    Please clarify the following doubt. If I earn a profit of Rs.four lakhs in daytrading how
    much tax I have to pay this year and what is the percentage ?
    Can STT be deducted in tax liability ?
    ( I have no other income)
    Thanks
     
    Last edited: Jul 18, 2011
  4. anuragmunjal

    anuragmunjal Well-Known Member

    Joined:
    Jul 7, 2009
    Messages:
    696
    Likes Received:
    1,168
    Trophy Points:
    93
    Re: daytrading



    hi Bestnifty

    if u earn 4 lacks profit in daytrading, u can show it as ur business income frm stock trading.
    u cannot deduct stt frm this profit..on the other hand since u are showing this as ur 'business income', u can deduct other costs incurred such as internet, software, commuting, depriciation fr any hardware purchased etc.
    as u have stated that u have no other income, after deducting the above mentioned 'expence', and putting some amount in tax saving instruments, u will not have to pay any tax.(or a very negligible amount).
    a CA wd be able to do the exact calculation.

    regards
     
    record likes this.
  5. record

    record New Member

    Joined:
    Jan 12, 2011
    Messages:
    17
    Likes Received:
    4
    Trophy Points:
    3
    Thank you very much anuragmunjal for you valuable reply.
    The below questions may be repeatedly asked.

    In my above question no. 4, can I adjust the amount 8000 from my profit?

    In my above question no. 5, If I get some profit from intraday, delivery trading, Can I adjust Brokerage charges,Transaction charges,Security Transaction Tax (STT),Education Cess(2%),Higher Education Cess(1%),Stamp Duty from my profit?

    In my above question no. 6, Over 15% tax, any addition service tax or educational cess do i need to pay?

    In case of bonus shares, Since It is split of actual stare, how can I calculate profit?

    In case of losses, Do I need to mention 2010-11 year loss in ITR2 form(FY2010-11), to adjust this loss next year, or directly I adjust next year(fy2011-12)?



    Thanks in advance
     
    Last edited: Jul 19, 2011
  6. anuragmunjal

    anuragmunjal Well-Known Member

    Joined:
    Jul 7, 2009
    Messages:
    696
    Likes Received:
    1,168
    Trophy Points:
    93
     
    silverm likes this.

Loading...

Share This Page