Surcharge,234A,234B,234C to be calculated on LTCG
I am calculating tax liability of one of my client. The situtation is Company is in loss of 30 crore. But company has a Long term capital gain of 1.5 crore.
And tax is to be paid on ltcg. Now my doubt is since the LTCG has exceeded 1crore, should the assessee pay surcharge.
Surcharge is payable if Total income exceeds 1 crore, but in this case only LTCG has crossed 1crore not the total income.
So other specific doubts are:
1. Surcharge is payable if Total income increases 1 crore or Total Taxable Income exceeds 1crore?
2. Interest u/s 234A, 234B and 234C is to be paid for the due dates falling only after occurance of capital gain?
If company has net loss from Bussiness and LTCG then both can be set off, Therefor no tax payable.
I agree with Sanjay Ganna that business loss of current year can be set off agnst ltcg. Further interest u/s 234 C will be applicable from the period when the ltcg arise.
As per Section 71 Business loss can be set off against Capital gains. Hence loss of business can be seff against lTCG.
As per section
2(45) "total income" means the total amount of income referred to in section 5, computed in the manner laid down in this Act ;
Hence Surcharge is payable on the income computed in the manner laid down in the act.
Means Surcharge is on Total taxable income.
Section 234B,C is payable only from the date of capital gains.
We have to enter capital gains quarter wise details in ITR.
Just a add on to my answer, surcharge is applicable on total income. Eg: In your case surcharge will be applicable if LTCG exceeds 1 crore if we ignore the business loss.