Tax on Total Income and STCG

Income Tax
1

Hi,

I have this query, as per old regime there is no tax upto 5lakhs Net Income (as they provide rebate of 12500).
Now let say my Net Income is 3.5 Lakhs and out of this 1 lakh is from STCG.
The Income tax protal asks me to pay taxes on this 1 Lakh, which I believe is not right as the total salary is not 5 lakh.

Can someone please clarify ?

2

Hi @AKASH_MITTAL,

Yes, you do get a rebate in the old regime if your income is below ₹5L. However, the maximum rebate amount is ₹12,500. AS STCG is taxed at 15% and not at slab rate, your tax liability will be more than ₹12,500. Hence, in this case you’ll have to pay the differential amount as taxes.

3

@Surbhi_Pal But your founder many times said on public forums that the STCG can be taxed at slab rate , if our intent was to speculate. Now who is right?

He mentioned the same thing in this video (timestamp -1:12:56) : https://www.youtube.com/live/nb6mdiF1E4A?si=Edl0HcSpdL-jAJxA&t=4375

4

Hi @Nick00,

Reporting settlements (trades) as CG or Business Income depends on the intent of the taxpayer. If the trade was undertaken with the intent of long term investment for capital appreciation and not earning short-term profit out of it then it has to be reported as CG and not Business Income and vice-versa. The ITD also recommends following the same reporting for the following years once you report CG as Business Income.

You mentioned STCG and hence, I clarified the taxation on that.

1 Like
5

Thank you for the clearing the confusion.

6

Hi @Surbhi_Pal ,
Suppose someone has a business of offline coaching center and he also earned a income of around 10lakhs from delivery trading of stocks (STCG transactions), and he wants to report these stcg transactions as business income .
Then , can he file itr under presumptive income section 44AD? (if his total turnover from both businesses is less than 40lakhs)

is it allowed to file income from multiple businesses under presumptive taxation scheme?
and which business code is preferable for stcg transactions reported as business income?

and in turnover section should we fill combined turnover of both business?