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

moneypick · #**121** 11th September 2007, 10:11 PM

Quote:

Originally Posted by rani2006

diosys sir,

I had purchased some shares in 2001 @30/-..if i sale in 2007 @60/-ie after

6 years / how much tax i have to pay ? SHares income is to be added in the salary or it is taxable separately?

thanks for trouble sir.

Quote:

Originally Posted by diosys

Dear Rani....

There would be no tax liability provided these shares are sold on the stock exchanges and the applicable STT has been paid on the above transaction....

Hi Diosys Sir,

In the above scenario, if we got bonus share in the year 2007 then what is our tax liabiity.

Our holding 1000 shares @ Rs.30 = 30000

Bonus Share 1:1 in the month of Oct`07 when stock price is 100

then our holding 2000 shares @ Rs.50 = 100000

Regards,

(moneypick)

nitin_malik · #**122** 11th September 2007, 11:29 PM

Please could you advise if i would have to pay tax on mutual funds which i had invested in about 3 year back and would like to redeem now. I am a NRI so am not sure about this aspect.

Please could you advise

Regards

Nitin

diosys · #**123** 13th September 2007, 03:21 PM

Quote:

Originally Posted by moneypick

Hi Diosys Sir,

In the above scenario, if we got bonus share in the year 2007 then what is our tax liabiity.

Our holding 1000 shares @ Rs.30 = 30000

Bonus Share 1:1 in the month of Oct`07 when stock price is 100

then our holding 2000 shares @ Rs.50 = 100000

Regards,

(moneypick)

Dear Moneypick...

In the case of Bonus Shares the cost of accusation of the bonus shares would be nil.....yes nil....Hence whatever the amount you sell would be capital gains.....Sec 55(2)(aa)(iiia) of the Income Tax Act 1961....

BUT the price of the original shares would be what it was bought for...

Continuing your eg....

1000 original shares @ 30 if suppose sold at Rs. 50 then capital gain is (50-20)*1000 = Rs. 20,000

1000 bonus shares the capital gain = Rs. 50,000

Total capital gain Rs. 70,000

moneypick · #**124** 13th September 2007, 07:28 PM

Quote:

Originally Posted by diosys

Dear Moneypick...

In the case of Bonus Shares the cost of accusation of the bonus shares would be nil.....yes nil....Hence whatever the amount you sell would be capital gains.....Sec 55(2)(aa)(iiia) of the Income Tax Act 1961....

BUT the price of the original shares would be what it was bought for...

Continuing your eg....

1000 original shares @ 30 if suppose sold at Rs. 50 then capital gain is (50-20)*1000 = Rs. 20,000

1000 bonus shares the capital gain = Rs. 50,000

Total capital gain Rs. 70,000

Diosys Sir,

As per your last message, there is NIL tax on long term capital gain, therefore Rs. 20000/- is long term gain, but what is your advice on Rs.50000/-, this is short term gain or long term gain. What is our tax liability on Rs.50000/-.

Thanks for your valuable advice.

(moneypick)

shifazaid · #**125** 15th September 2007, 10:05 AM

dear sir, (diosys or whoever that can answer to my question)

first of all i would like to thank you for starting this thread. we have a demat account in my wife's name. she also has a pan card. i am a nri and send money regularly into my non-resident state bank of india account, in which my wife is also a joint account holder. we have invested almost rs 5 lakhs into various stocks over a year ago basically we are long term investors.

1. i would just like to know if there is a problem investing such an amount, and would like to inform you that the payment for this amount has been from my non-resident sbi account to the broker for buying the stocks.

2. also would like to know how i would be taxed, i mean at what rate?
thank you in advance
shifazaid

Saint · #**126** 5th October 2007, 11:32 AM

Quote:

Originally Posted by diosys

Dear Etrader...

I would not suggest you to open a company for dealing in shares (presuming you are talking for your self dealing)....

It would involve a lot of cost....Both in setting it up(Rs. 15,000) , running it and on the taxes front...

A company is taxable at the flat rate of 30% whereas an indi at different slabs of rate....Further Fringe Benefit Tax is also payable on the company expenses....Then audit would be compulsory under Companies Act...Such many more costs are associated with opening and running a company...and that too without any benefit at all....

Take my advice and do not float a company if you are asking for self investment vehicle....

Hi Diosys,

Missing the last few weeks..........hope all's well with you.Looking fwd to your posts.

Saint

ps:If not an inconvenience,plz do activate your PM

yoogi · #**127** 5th October 2007, 11:52 AM

dear shifazaid,

what you are actually doing is repatriating your money to mother country and invest that. Whether repatriating involves taxes, I am not very sure.

But an NRI who pay taxes in another country is unlikely to be taxed in India if he pays the tax in a country where India has doube-taxation-avoidance-treaty. Ask your wife to consult an auditor to make sure you file your income in india. Your wife can sign the forms on your behalf.

Also gift to your wife will not be taxed. So whether you invest or your wife invest, it really doesn't matter.

However I would advice you to invest in your name (not even joint name buddy) and manage it with your wifes help . No matter how much you trust your wife, you better invest in your name and if necessary make a will as well. That will make sure your poor brothers and parents will get a share if you want them to. Watch CNBC TV 18's Suze's programmes on sat evenings / sunday mornings. Also read "money 101" pages of cnn world website.

Whatever you earn from indian investments will be taxed. Since you are a long term investor ( all equity investments are kept for atleast an year), you need not pay taxes on your earnings from investments.

equitystock1 · #**128** 5th October 2007, 12:45 PM

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Rajagopals · #**129** 16th October 2007, 04:55 PM

Quote:

Originally Posted by Asia Etrader

Here is some general tax information.

http://www.asia-etrading.com/equitie...s.php#Taxation

Hi Diosys:

Excellent thread with lots of meaningful posts. My sincere appreciations to you for starting this thread and taking it forward. It is heartening to note that you are responding to every query with maximum clarity, and that some other knowledgeable members too are contributing. I have greatly benefited and stand guided from this thread. Thank you. I hope you find time to keep up this good work.

In the above link provided by Etrader, I read one para as follows:

"Tax laws require capital gains to be computed by allocating securities on a First-in, First-out (FIFO) basis. Dematerialised securities are deemed to have been sold on a FIFO basis according to date of credit by the depository, irrespective of the sequence of actual purchase."

Does it mean that irrespective of the time one holds the shares in Physical Form, only the period between the date of dematerialising and the date of selling the shares is considered as the period of holding for assessing the tax? I am holding some shares in Physical form for the last over 15-20 years and am planning to demat and sell some of them soon . In view of the above, am I not eligible for LTCG benfits, even though I held the shares for long enough, but sold it within one year of dematting same? Or has it to be read differently?

After selling shares which are eligible for LTCG, what is the proof that I need to keep for proving the period of holding of the shares in my hands, to the Tax authorities? Is such proof to be attached to the Returns?

Kindly advise.

Thanks & regards

RAJ

Rajagopals · #**130** 17th October 2007, 01:09 PM

Quote:

Originally Posted by Rajagopals

Hi Diosys:

Excellent thread with lots of meaningful posts. My sincere appreciations to you for starting this thread and taking it forward. It is heartening to note that you are responding to every query with maximum clarity, and that some other knowledgeable members too are contributing. I have greatly benefited and stand guided from this thread. Thank you. I hope you find time to keep up this good work.

In the above link provided by Etrader, I read one para as follows:

"Tax laws require capital gains to be computed by allocating securities on a First-in, First-out (FIFO) basis. Dematerialised securities are deemed to have been sold on a FIFO basis according to date of credit by the depository, irrespective of the sequence of actual purchase."

Does it mean that irrespective of the time one holds the shares in Physical Form, only the period between the date of dematerialising and the date of selling the shares is considered as the period of holding for assessing the tax? I am holding some shares in Physical form for the last over 15-20 years and am planning to demat and sell some of them soon . In view of the above, am I not eligible for LTCG benfits, even though I held the shares for long enough, but sold it within one year of dematting same? Or has it to be read differently?

After selling shares which are eligible for LTCG, what is the proof that I need to keep for proving the period of holding of the shares in my hands, to the Tax authorities? Is such proof to be attached to the Returns?

Kindly advise.

Thanks & regards

RAJ

Hi all:

I notice that Diosys is not to be seen here in the last few weeks. Let's hope everything is fine with him and he will start responding soon.

Meantime, shall be obliged if anyone can guide me on my above queries.

Thanks & regards

RAJ

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