541
July 13 To July 19, 2019 u Taxmann’s Corporate Professionals Today u Vol. 45 u 154 An Individual who is not a citizen of
IndiaThus, in case an assessee doesn’t possess
Aadhaar card, it is advisable for him to ap-
ply for it and quote its Enrolment ID while
furnishing his return of Income.
Capital Gains
Q 30. I have earned profit from sale of
listed shares which were kept for more
than 12 months. Whether it will be treated
as capital gain or business profit?
Vide Circular No. 6/2016, dated 29-2-2016, the
CBDT has instructed the Assessing Officers to
consider the following while deciding whether
surplus generated from sale of listed shares
or other securities is taxable as capital gains
or business income:
- Where the assessee himself, irrespective
of the period of holding of listed shares
and securities, opts to treat them as
stock-in-trade, the income arising from
transfer of such shares/securities would
be treated as its business income. - In respect of listed shares and securities
held for a period of more than 12 months
immediately preceding the date of its
transfer, if the assessee desires to treat
the income arising from the transfer
thereof as capital gains, the same shall
not be put to dispute by the Assessing
Officer. However, this stand, once taken
by assessee in a particular Assessment
Year, shall remain applicable in subse-
quent Assessment Years also and the
taxpayer shall not be allowed to adopt
a different/contrary stand in this regard
in subsequent years.
The above principles have been formulated
by the CBDT with the sole objective of re-
ducing litigation and maintaining consistency
in approach on the issue of treatment of
income derived from transfer of shares and
securities. All the relevant provisions of the
Act shall continue to apply on the transactions
involving transfer of shares and securities.
CBDT has decided that the income arising
from transfer of unlisted shares would be
considered under the head ‘Capital gains’,
irrespective of period of holding, with a view
to avoid disputes/litigation and to maintain
uniform approach - Letter F.No.225/12/2016/
ITA.II, dated May 2, 2016.
Q 31. I have earned a profit of ` 2 lakhs
from sale of long-term listed equity shares
in the month of June 2018. Is this gain
exempt from tax? Whether I have to report
this gain in ITR form?
The Finance Act, 2018 introduced a new
Section 112A to withdraw Section 10(38)
exemption for the long-term capital gains
arising from transfer of listed securities, being
equity shares, units of equity oriented funds
or units of business trusts. As per section
112A, long-term capital gains arising from
transfer of listed securities, being equity
share, units of an equity oriented fund or
a units of a business trust shall be taxed at
10% in excess of `1 lakh.
The new Section 112A is applicable from
Assessment Year 2019-20. Thus, you are re-
quired to report the long-term capital gain
arising from sale of listed shares in ‘Schedule
CG’ of Income-tax Form and pay tax at the
rate of 10% on the gain exceeding `1 lakh.
Q 32. I have earned profit from intra-day
trading. Is it taxable as business profit or
capital gain?
Intra-day trading is considered as speculation
business and the income therefrom would
either be speculation gain or speculation loss.
Income from speculation gain is taxed at the
normal rates. However, any losses arising
from speculation business are to be set off
only against profit of any other speculative
business.FAQs ON INCOME-TAX RETURNS FOR ASSESSMENT YEAR 2019-