r2i forum

RRK;36902 Bobus,
On reviewing the link you posted for different question,
http://www.thehindubusinessline.com/iw/2004/04/04/stories/2004040400121200.htm

I came across this question and answer.


Query
I am a government employee having a taxable salary income of Rs 89,000 per annum. This apart, I have also purchased and sold shares in the secondary market, which has resulted in a short-term capital gain. At what rate would the short-term capital gains be charged to tax?
Anonymous
Reply There are no separate tax rates in respect of short-term capital gains. Short-term capital gains will be charged to tax at the normal rates applicable to you.

I believe this is wrong. I guess Rajesh and you discussed this earlier.
For Indian Residents, STCG rates for equity is 10% flat and can't avail standard deduction. Can you pls confirm my belief ?[/quote]

That reply is not accurate.

Where stock that is sold is subject to STT, the STCG rate is 10% flat (plus cess) for all non-residents and residents (RNOR and ROR) who do not fall in the category below:

For residents whose total income (including STCG if any from shares that are subject to STT) is less than the threshold limit of 1.1. lacs (earlier 1 lac), income tax liability is zero.

Example

Shyam (RNOR) has total income (India source) of 115K rupees of which STCG from equity shares subject to STT is 20K and other India source income is 85K. Assume none of this 85K of other income is LTCG or STCG from shares subject to STT or equity / equity oriented mutual fund unit sale.

Tax liability of Shyam is 10% of 5K [ 115K - 110K] and not 10% of 20K.

If Shyam were non-resident, and all other facts above hold, then Shyam's India tax liability would be 10% of 20K.