Cochin Shipyard Ltd IPO Message Board (Page 16)

15% short term long term Nil

If you sale within year then whatever gain arise, it is treated as short term capital gain and it is taxed @ 15% u/s 111A
if you sale after year then whatever gain arise, it is treated as long term capital gain and it is exempt from tax u/s 10(38)

Septa Sir , what is the meaning of short term and long term? I am new investor. Please guide.

Less then one year short term

Exempt income up to Rs. 2,50,000 by any source, i think it also include short term capital gain, if you earn rs. 1,50,000 a year by selling share, which are with in 12 month period and other any kind of income is below rs. 1,00,000 than no tax liabilty, as it falls below exempt income limit of rs. 2,50,000. Septa ji and Maulik ji correct me if i am wrong. I am not to sure about the treatment of short term capital gain as per exempt limit of rs. 2,50,000 is applicable or not for the same. Please guide me Septa ji and Maulik ji. :-)

I too have same doubt if my parent income is less than 2.5 lakh and i am getting ipo profit of 50000 in a year will i need to pay 15 percent???

For short term capital gain u need to pay 15% as tax, but if you have only short term capital gain and no other income then it will be taxed as per income tax slab rates as regular income, but in case you have any other income and short term capital gain then it will be taxed at 15% irrespective of it is IPO or regular trading. And in case of long term capital gain it is completely exempt from tax

RAO ji what about basic exemption of rs. 2,50,000 in STCG and if i am not wrong if you are only generating income via shares, than it will consider as your income from business and profession. Taxation is too much complicated, for this part. Any senior, who is being showing STCG in his income can guide us properly or any C.A.

Looking forward for an proper clarification.

With example and it''s Calculation.

Thanks.

Hi Kenny, That is what i was saying if you have only short term capital gain it wil be taxed as regular income taking 250000 basic exemption, say for example if you have only STCG on shares and your gain during the year is 240000 then for you NIL tax, or if you have 260000 even then nil tax since for income below 500000 there is a rebate of 5000 tax so if your gain crosses 300000 then only you will, be taxed @10% upto 500000.

RAO Ji that''s not what i am asking, if someone had income from sources like bank int., job, and other cash income. And some portion of STCG. than basic exemption limit of Rs. 2,50,000 will apply to them or they have to pay 15% tax on the portion of income genrated from selling of shares.

As income is not particulary from single source.

Thanks.

HI kenny
Let me give you an example,
STCG you earned 250000
Other income 100000
If your total taxable income excluding STCG is below the threshold taxable limit, then such shortfall can be adjusted against STCG. The balance STCG will be taxed at 15% plus applicable surcharge and education cess.
So in the above example, other income is 100000 which is 150000 less than basic exemption, so u can avail this shortfall say 150000 and pay tax @ 15% on balance income, so in the given case out of STCG of 250000 avail 150000 shortfall and pay tax @15% on 100000(250000-150000)=15000 and less rebate u/s 87 of 5000/- is eligible as income is below 5lakhs so net tax to be paid is 10000/- plus 3% cess that comes to 10,300/-

Take another example
STCG 250000
other income 300000
here other income is crossing basic exemption limit so there is no shortfall and in this case STCG is straight away taxed at 15% and other income is taxed buy considering basic exemption limit and taxed at normal rates
so tax on STCG=250000*15%=37500/-
and tax on other income is 300000-250000(basic exemption)=50000*10%=5000 tax
so total tax is 42500 and here there is no rebate allowed u/s 87 as total income is crossing 500000/- so total tax is 42500+3%cess=43775/-

Thank you so much RAO SIR Ji, you cleared my doubt very well. Thank you once again. :-)

Dinesh Ji Ye information aapko kaha se mile

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