4.6. SHORT-TERM / LONG-TERM CAPITAL GAINS – HOW CHARGED TO TAX
Tax will be calculated as follows ---
Gross Total Income [excluding income given in columns (2) and (3)] |
Long-Term Capital Gains taxable under section 112 |
Short-Term Capital Gain taxable under section 111A |
(1) |
(2) |
(3) |
Step A1 – Find out Gross Total Income from all sources excluding income given in Step B1 and Step C1. |
Step B1 – Find out Long-term capital gain |
Step C1 – Find out Short-Term Capital Gain taxable under Sec. 111A |
Step A2 : Deduct, deduction permissible under sec. 80C to 80U ( A2 cannot exceed A1) |
Step B2 : Find out income tax on Long-Term Capital Gain at the rate specified by Sec. 112 |
Step C2 : Find out Income tax on Short-Term Capital Gain at the Rate specified by Sec. 111A |
Step A3 : The balancing amount is “other net income” |
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Step A4 : Find out income tax on “ other net income”. |
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Step D – Add the tax computed at Steps A4 , B2 and C2 . it is income tax on net income ( income tax on A3+B1+C1)
Step E - Add surcharge on income tax computed under Step D.
Step F - Find out D + E
Step G - Add education cess at the rate of 2% of Step F.
Step H - Add secondary and higher education cess at the rate of 1% of Step F.
Step I - Tax liability is equal to F + G + H |
