STT paid long-term capital gains is exempt
A reader observes from the article "Search for the elusive simple tax return" in The Hindu dated June 12 that the long-term capital gains, on which STT (Securities Transaction Tax) is paid is stated to be exempt under Sec. 10(34). But it is exempt under Sec. 10(38). Sec. 10(34) relates to exemption of dividend from domestic companies. The above mistake may be corrected.
The reader, KR.Veerappan, Chartered Accountant, Karaikudi, is correct in pointing out the mistake in the above article. Exemption for long-term capital gains, where the sale of listed shares on a transaction, through a recognised stock exchange on which securities transaction tax is paid, is exempt under Sec. 10(38). The tax consultant would like to add a note of caution, that it is not all profits on sale of shares of which securities transaction tax is paid is exempt. If the surplus is assessable as business income, the exemption under Sec. 10(38) will not be available.
S. RAJARATNAM
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