A Complete Guide On Taxation Of Long-Term Capital Gain

MCQ SELF CHALLENGE # 0067 ON TAXABILITY IN CASE OF LONG-TERM CAPITAL GAIN

Taxability in Case of Long-term Capital Gain

Dear Professional Seniors & Friends.

Warm Greeting

Here is the Next post of #MCQ on concept-based practical professional knowledge on Taxability in case of long-term capital gain in a unique manner to be self-answered by participants. The detailed answers to these MCQs shall be posted the next day for the self-assessment of the participants

MCQ 67.1: Mr. X, a nonresident has a total income of Rs 5,00,000, out of which a long-term capital gain of Rs 4,00,000. The taxation services rate applicable to him will be

A) A total of Rs 5,00,000 shall be taxed at slab rates.

B) Rs 2,50,000 shall be taxed at slab rates,

C) Rs 2,50,000 shall be taxed at flat rates.

D) Rs 4.00.000 shall be taxed at flat rates.

MCQ 67.2: What if in the above question. Mr. X is a resident person?

A) A total of Rs 5,00,000 shall be taxed at slab rates.

Rs 2.50,000 shall be taxed at slab rates.

C) Rs 2,50,000 shall be taxed at flat rates.

D) Rs 4,00,000 shall be taxed at flat rates.

Answer MCQ Self Challenge # 0067

This post of MCQ is on the concept relating to the taxability of long-term capital gains when the person is nonresident.

Answer to MCQ 67.1: D) Rs 4,00,000 shall be taxed at flat rates;

Answer to MCQ 67.2: C) Rs 2.50,000 shall be taxed at flat rates.

Practical Analysis for MCQ 67,18 67.2-

1. As per Section 112, Tax on Long-term capital gains shall be charged at 20%.

2. However where the total income as reduced by long-term capital gains is below the maximum amount not chargeable to tax, the long-term capital gain shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount not chargeable to tax and the tax on the balance of such long term capital gains shall be computed @ 20%

3. But the point to note is that the provision in point 2 is applicable only to a resident individual or HUF and not applicable to a non-resident Individual.

4. Based on the above analysis, correct answer MCQ 1 D) Rs 4,00,000 shall be taxed at flat rates.

5. Correct answer MCQ 67 2: C) Rs 2.50,000 shall be taxed at flat rates.

(Disclaimer: The objective of the MCQ post is just to discuss the concept, it may happen, by change of facts, the answer may be different. Please do not treat this as a professional opinion: you can definitely have your own opinion.)

Sincere Regards!

CA Sanjay Kumar Agrawal

Mobile: 9810116321