Can anyone tell me about income from sale of shares?

Question

I am about to file IT Return of my uncle (Indian Resident, 64 years of age) for 2005-06, having income only from interests & dividends (Usually files Nil Return). During the year, he has recd 70000/-(approx.) from sale of shares. Will it be considered while calculating his taxable income? If yes, under which head it will be shown?

Answer 1

If you are filing your uncles returns in India,

(1) All interests either from Banks or post office are taxable.
(2) All dividends from shares are tax free.
(3) If the shares are sold through a stock exchange paying transaction tax, if the shares were sold within one year from date of purchase, then that income will be taxable @10%. If the shares were sold after one year from the date of purchase, then that income is tax free.
(4) Your uncle's basic exemption limit for this year is Rs.1 lakh. (From next year Rs.1.85 lakhs.

Answer 2

If you are preparing his U.S. Federal Income Tax return, you would use Schedule D to report the capital gains from the sale of his stock. But, in order to calculate the capital gains, you would have to know what his tax basis is, i.e., what is the cost of the stock that he sold for $ 70,000. If he paid $ 50,000 for the stock, he has a $ 20,000 taxable gain. If he paid $ 90,000, he has a capital loss.

Answer 3

Are you talking about tax law in India or USA?If America I can help but India no.

Answer 4

if holding is more than one year than it is tax free in INDIA