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Income tax clarification for short term capital gain

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  #1  
Old 15th July 2011, 10:42 AM
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Default Income tax clarification for short term capital gain

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



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  #2  
Old 15th July 2011, 11:54 AM
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Default Re: Income tax clarification for short term capital gain

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
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  #3  
Old 18th July 2011, 12:57 PM
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Default 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 by bestnifty; 18th July 2011 at 01:00 PM. Reason: title
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Old 18th July 2011, 01:29 PM
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Default Re: daytrading

Quote:
Originally Posted by bestnifty View Post
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


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
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  #5  
Old 19th July 2011, 04:33 PM
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Default Re: Income tax clarification for short term capital gain

Quote:
Originally Posted by anuragmunjal View Post
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
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 by record; 19th July 2011 at 04:38 PM.
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Old 19th July 2011, 10:32 PM
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Default Re: Income tax clarification for short term capital gain

[QUOTE=record;570608]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
?
hi Record

u cannot adjust this amount with ur 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?

all the above mentioned charges have been accounted fr in ur profit, ie. ur profit is net after deducting these charges.
when stt was introduced, there was a provision that whatever stt u have paid can be deducted frm ur tax liabilty on profits frm speculative gains in the stock mkt. this provision was removed in subsequent years. therefore,whatever profit u have earned after deducting these charges (as ur broker's statement shows), is taxable...

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)?


these questions are too technical, I think a tax consultant wd be able to answer them better.

regards


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