Amendment of section 111A.
41. In section 111A of the Income-tax Act, in sub-section (1), in the proviso, for the words “ten per cent.”, the words “fifteen per cent.” shall be substituted and shall be deemed to have been substituted with effect from the 1st day of April, 2009.
Notes on Clauses:
Clause 41 of the Bill seeks to amend section 111A of the Income-tax Act relating to tax on short-term capital gains in certain cases.
Under the existing provisions contained in sub-section (1) of the aforesaid section 111A, a special rate of tax of fifteen per cent. is provided on short-term capital gain arising from the transfer of a certain capital asset, being an equity share in a company or a unit of an equity oriented fund, where such transaction is chargeable to securities transaction tax.
The proviso to the aforesaid sub-section provides that in the case of an individual or a Hindu undivided family, being a resident, where the total income as reduced by such short-term capital gains is below the maximum amount which is not chargeable to income-tax, then, such short-term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such short-term capital gains shall be computed at the rate of ten per cent. It is proposed to amend the aforesaid proviso of the said sub-section so as to increase the tax on the balance of such short-term capital gains to fifteen per cent. instead of ten per cent.
This amendment will take effect retrospectively from 1st April, 2009 and will, accordingly, apply in relation to the assessment year 2009-2010 and subsequent assessment years.
