As
per regulatory guidelines, Tax (if applicable) has to be deducted at source for
all the profits done in the equity market transactions. Before crediting sales
proceeds it is the responsibility of the broker and the PIS cell to determine
the appropriate Tax and deduct it at source.TDS rate is different as per the
tenure of the investment. It can be classified as-:
Long-term
capital gain – If the period of holding is more than 1 year i.e. the difference
between the date of purchase and sell is more than 1 year, then the TDS rate
applicable is 0 %. Before 1st Oct 2004 this rate was 10% now it is tax-free
Short-term
capital gain - If the period of holding is less than 1 year i.e. the difference
between the date of purchase and sell is less than 1 year, then the TDS rate
applicable is 10%. Before 1st Oct 2004 this rate was 30%.TDS is computed on the
profit amount or the gain as per the applicable rate i.e. short term or long
term on a First-In, First-Out (FIFO) basis.
For
any TDS to be deducted and money to be remitted to bank account, there are
three things which have to verified-: Amount of gain = Selling price – Purchase
price
Duration
of holding i.e. long term or short term = Selling date – Purchase date
Source
of fund for purchase i.e. NRE or NRO
Important:
TDS is deducted only at the time of crediting sales proceeds.
We
Analytix provide you detailed Tax related solutions for your everyday need. We
have got a strong team of Tax practitioners who provide Tax consultations to
provide effective documents and procedures. We do services that include
Preparation and filing of quarterly return, preparation and filing of TDS
correction statements, Computation and e payment of TDS, Timely issuing TDS certificates,
providing regular updates related with TDS, Effective tax advice on salary and
non salary and TDS compliance.
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