Page 354 - DCOM301_INCOME_TAX_LAWS_I

Unit 12: Income under the Head Capital Gains

Notes

Notes

1. If the net income (other than long-term capital gain) is below the amount of first
slab which is not taxable (i.e. 2, 00,000), then the long-term capital gain is to be
reduced by the amount by which the total income (other than long-term capital
gain) falls short of the maximum amount which is not chargeable tax.
2. In this case, net income (other than long-term capital gain is (–) 24,000 which will be
allowed for carried forward i.e. not to be deducted from 2, 00,000. Therefore,
long-term capital gain shall be reduced by 2, 00,000. Thus, no tax shall be leviable on
long-term capital gain.

Self Assessment

Fill in the blanks:
25. Income Tax Act does not defines the term …………………….

26. For calculating depreciation different ………………………are made based on the name of
asset and then the rate of depreciation.
27. If an asset is used for less than ……………………… during a P.Y. then only ½ of the
depreciation will be provided on that asset.
28. Any profits or gains arising from the slump sale, affected in the previous year, shall be
chargeable to income-tax as capital gains arising from the transfer of …………………………

Case Study Sunderdas Haridas vs Assistant Commissioner of IT

he issue raised in Sunderdas Haridas vs Assistant Commissioner of IT relates to the
rate at which the short-term capital gains of ` 1,00,250 which was to be taxed under
Tthe provisions of section 115E of the IT Act. It is not disputed that the assessee is a
non-resident Indian to whom the provisions of Chapter XIIA of the IT Act apply. It is also
not disputed that the assets in question in respect of which the short-term capital gain of
` 1,00,250 was derived are of the nature of specified assets mentioned in section 115C of the
IT Act. For understanding the issue raised in this appeal it will be worthwhile to reproduce
the relevant provisions of section 115C, 115D and 115E of the IT Act.
Section 115D reads as follows:
“115D. (1) No deduction in respect of any expenditure or allowance shall be allowed under
any provision of this Act in computing the investment income of a non-resident Indian;
(2) Where in the case of an assessee, being a non-resident Indian:
(a) the gross total income consists only of investment income or income by way of long-
term capital gains or both, no deduction shall be allowed to the assessee under Chapter
VI-A;
(b) the gross total income includes any income referred to in clause (a), the gross total
income shall be reduced by the amount of such income and the deductions under Chapter
Contd...

LOVELY PROFESSIONAL UNIVERSITY 349