Querry Sec 80C deduction on STCG

Querry
I have a query on the subject matter as follows: An individual has GTI of Rs. 3.5 lacs out of which business income is Rs. 45,000/ and balance is STCG on STT paid shares.Will the person be eligible to claim Section 80C benefit of full Rs. 1 lac or it will be restricted to only till his business Income.Kindly clarify on availability of Section 80C benefit on STCG.
Best regards,FCA Kavita Agarwal
Answer 1
Section 111A(2) reads as follows:
(2) Where the gross total income of an assessee includes any short term capital gains referred to in sub-section (1), the deduction under Chapter VI-A shall be allowed from the gross total income as reduced by such capital gains.
Section 80C is covered by chapter VIA hence cant be claimed on STGC u/s 111A.
Miraj D ShahD J Shah & CoTax Management Consultants2 Elgin RoadKolkata 70002091-33-22871487 / 22870767 / 40034672
Answer 2
u/s 111A of the Income Tax Act, STCG w.r.t sale of equity shares on which STT is paid shall be chargeable to tax @ 15% +SC+Ecess.
No deduction u/c VIA is available on STCG u/s 111A.
Basic exemption is available from such STCG .
In your given case :
Business Income = 45,000
Short Term capital gain from sale of shares on which STT paid = 3,05,000
Gross Total Income = 3,50,000
Less Deduction u/s 80C = 45,000
(limited to business income)
Total Income = 3,05,000
(Represents STCG on which STT paid)
Basic Exemption (Considered Male and < 65 yrs) = Rs. 1,50,000
Balance Rs 1,55,000
Tax @ 15.45% (including 3% Ecess) = 1,55,000 * 15.45% = Rs. 23,948/-
Except for STCG u/s 111A, deduction benefit u/s 80C is available.
Hope this clarifies the matter.
Regards
Sujit Talukder
Answer 3
80C benefit will be restricted to Rs.45000 only
J.P.Agrawal
Answer 4
Hi,No deduction is allowable under Chapter VI A on such STCG, Kindly refer subsection 2 of Section 111A, which is reproduced below.
Tax on short term capital gains in certain cases.111A. (1) Where the total income of an assessee includes any income chargeable under the head "Capital gains", arising from the transfer of a short-term capital asset, being an equity share in a company or a unit of an equity oriented fund and-
(a) the transaction of sale of such equity share or unit is entered into on or after the date on which Chapter VII of the Finance (No. 2) Act, 2004 comes into force; and
(b) such transaction is chargeable to securities transaction tax under that Chapter,
the tax payable by the assessee on the total income shall be the aggregate of-
(i) the amount of income-tax calculated on such short-term capital gains at the rate of 49a[fifteen] per cent; and
(ii) the amount of income-tax payable on the balance amount of the total income as if such balance amount were the total income of the assessee:
Provided that in the case of an individual or a Hindu undivided family, being a resident, where the total income as reduced by such short-term capital gains is below the maximum amount which is not chargeable to income-tax, then, such short-term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such short-term capital gains shall be computed at the rate of ten per cent.
(2) Where the gross total income of an assessee includes any short term capital gains referred to in sub-section (1), the deduction under Chapter VI-A shall be allowed from the gross total income as reduced by such capital gains.
(3) Where the total income of an assessee includes any short term capital gains referred to in sub-section (1), the rebate under section 88 shall be allowed from the income-tax on the total income as reduced by such capital gains.
Explanation.-For the purposes of this section, the expression "equity oriented fund" shall have the meaning assigned to it in the Explanation to clause (38) of section 10.]
ThxRajesh Kr. Agrawal, FCA
Answer 5
Restricted to business income or 1 lac whichever is lower
Rgds
CA SKChoudhary
Answer 6
Kindly refer to sectin 111A. Deduction under chapter VIA will be limited toGTI as reduced by STCG i.e. in your case Rs. 45000/-.
Thanks
CA_Pankaj Agrwal
225, Central Zone, Tej Kumar Plaza, HazratganjLucknow 226001
Phone: 4009167 pankaj@mgcoca.com agrwal.pankaj@icai.org agrwalpankaj@gmail.com
Answer 7
He or she will be entiled to claim 80c deduction upto only from his or her other income on which he or she does not claim tax at special rate.Therefore no deduction will be allowed from short term capital gains which is taxed ar special rate
ghoshalco@hsisindia.com
Answer 8
He will only be entiltled to a deduction limited only upto his business income which in this case is only Rs.45000/-
With Regards CA.Vinod Kumar09810969836
Answer 9
Ms. Kavita Agarwal,
Hi. This the good question raised by you. As per Income Tax Act, no one can get benefit of
Section 80C on the STCG & LTCG whether STT paid or not. The individual get benefit of Rs. 45000 only as 80C benefit in the present case. Full benefit of Rs. 1.00, he cant claim. So benefit of 80C is not available on STCG. Please check Section 111A. You will find there that no benefit of 80C is not available on STCG
Thanks & regards,
Vikash Gadia
Answer 10
Dear Ms. Kavita, In your case, deduction u/s 80C will be Rs. 45,000/- i.e. limited to your GTI excluding STCG with STT in terms of Section 111A(2). Thanks & Regards, CA ANAND JHUNJHUNWALA Mobile : 9830355460
Answer 11
The tax implication on the matter as per me is as follows: 80 C will be allowable to the extent of income other than STCG (STT PAid) i.e. RS 45000.00 On the STCG however tax @ 15% will be applicable subject to the exemption limits allowable depending upon Gender and age.
ThanksCA Vikash Tibrewala