Ostroff, Fair and Company
*Ostroff, Fair and Company>>>India Taxes

Advise me Income Tax Sec. correct or not. Tax free Dividend-10(34), Tax Free shares LTCG-10(38), Units LTCG-11


1) Please let me know the Indian Income tax sections for the following incomes for me to file my returns.
a) Share of Profit from Partnership company. sec.10(2a) ?
b) Transaction Tax paid Short term capital gains Sec.111a ?
c) Transaction Tax paid Long Term cap. gains Sec. 10(38) ?
d) Mutual Fund Units Long Term Cap. Gains 10% Tax- Sec.112 ?
e) Tax free Shares Dividend. 10(34)

2) I have sold 10 years old listed shares and my gain is Rs.3000/- and Tax free as I have paid transaction Tax for the same. But if I index it, then I will receive a loss of Rs.17,000/-. I want to index it and claim a loss of Rs.17,000 and carry forward the same for next year. Can I do it?

N,J,Reddy
neswarareddy@yahoo.com

1)
a) Share of Profit from Partnership company. sec.10(2a) ?

Correct. Share of profit from a partnership firm is exempt u/s 10(2A)

b) Transaction Tax paid Short term capital gains Sec.111a ?

Section 111A provides the method of calculation of TAX PAYABLE where total income includes short term capital gain on sale of equity shares / units of equity oriented fund.
Such capital gain being taxable @ 10%.

c) Transaction Tax paid Long Term cap. gains Sec. 10(38) ?

Section 10(38) provides for exemption for long term capital gain on sale of equity shares / units of equity oriented fund.

d) Mutual Fund Units Long Term Cap. Gains 10% Tax- Sec.112 ?

Section 112 provides the method of calculation of TAX PAYABLE where total income includes any income, arising from the transfer of a long term capital asset, which is CHARGEABLE under the head "capital gains".
Where such capital asset is a listed share / unit of a mutual fund then tax payable cannot exceed 10% of the capital gain calculated without indexation.
NOTE: This section will not apply to transactions covered u/s 10(38).

e) Tax free Shares Dividend. 10(34)

Correct

2) No you cannot do it.

Income from such transactions is exempt u/s 10(38).
"Exempt" means not included in the calculation of Total Income.
"Income" includes "loss". Where income is excluded loss will also be excluded.
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