Mukesh Patel.in
practical tax & investment planning online
international tax expert / columnist / author / speaker

NA BULL… NA BEAR…BANO MARKET KE SHER!

Investment In Shares Is Your Best Bet To Beat Inflation
And If Rightly Handled Can Earn Big Fortunes For You!

TAX LURES OF THE CAPITAL MARKET
· Dividend from shares/income from units totally exempt from income tax
· All investments of capital market exempt from wealth tax
· LTCG on sale of equity shares/units of equity funds chargeable to STT fully exempt from income tax
·  STCG on sale of equity shares/units of equity funds chargeable to STT liable to tax at a flat rate of 15%
·  Short term capital loss (STCL) on shares/units eligible for set-off against STCG arising from any other assets liable to tax even at the rate of 30%

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SHARE INVESTMENT NOT BUSINESS!

Mumbai High Court Stresses On Need For

Uniformity & Consistency In Approach!

“Activity of a taxpayer accepted as investment in shares in earlier years cannot be treated as business in subsequent years, if facts are the same.” This landmark ruling of the Mumbai High Court delivered on 6th January, 2010 will make several investors heave a sigh of relief, in the backdrop of the recent onslaught of the Income-tax Department in treating capital gains from securities liable to tax as business income from trading in shares. While long term capital gains from securities are exempt and short term gains attract a concessional tax, business income gets taxed at normal rates. (more…)

Now no Capital Gain without Tax Pain!

End Of Tax Honeymoon For Market Investors!

Understanding The New Capital Gains Regime

New Rules for Computation

  • Present distinction between long term and short term gains to be eliminated.
  • Current exemption for capital gains arising from transfer of personal effects and agricultural land beyond specified urban limits to continue.
  • Base date for computing cost of acquisition shifted from 1st April, 1981 to  1st April, 2000. 
  • Indexation benefits can be availed for all assets held for atleast one year.  

No More Tax Concessions

  •  Zero tax on STT paid long term capital market gains and 15% concessional rate for short term market gains to end on 31st March, 2011. 
  • No more concessional rates of 10%/20% for taxing specified long term gains. 
  • All capital gains to be taxed at the taxpayer’s applicable marginal rate. Securities Transaction Tax (STT) to be simultaneously eliminated.

 Exemptions Abolished & Redesigned

  • Present exemption u/s. 54EC via investment in specified bonds abolished. 
  • Current exemptions u/s. 54, 54B and 54F attempted to be redesigned under a new scheme of relief for roll over on the basis of a given formula.  (more…)
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