CHAPTER 8 TAXATION

- Capital Gains Tax

- In the case of long-term capital gains arising out of equity shares and equity-oriented mutual funds, the tax is applicable only on capital gains above Rs. 1 lakh.

- The dividends would be taxable in the hands of the recipient at the applicable tax rate.

- Setting off of Capital Gains and Losses under IncomeTaxAct

 Capital loss, short term or long term, cannot be set off against any other head of income (e.g. salaries).

 Short term capital loss is to be set off against short term capital gain or long term capital gain.

 Long term capital loss can only be set off against long term capital gain.

- STT applicability for Investors in Equity oriented Mutual funds

- Equity Linked Savings Schemes (ELSS) are eligible for deduction under Section 80C of the Income TaxAct.

- The TDS applicable for non-resident investors is the lower of the rate specified in the income tax regulations or the tax specified in the DTAAof the country where the investor is resident.