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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 answer of these MCQs shall be posted next day for the self assessment of the participants.

MCQ 67.1: Mr. X, a non resident has total income of Rs 5,00,000, out of which Long term capital gain of Rs 4,00,000. Tax Rate applicable to him will be –
A) Total Rs 5,00,000 shall be tax at slab rates.
B) Rs 2,50,000 shall be tax at slab rates.
C) Rs 2,50,000 shall be tax at flat rates.
D) Rs 4,00,000 shall be tax at flat rates.

MCQ 67.2: What if in above question, Mr. X is a resident person?
A) Total Rs 5,00,000 shall be tax at slab rates.
B) Rs 2,50,000 shall be tax at slab rates.
C) Rs 2,50,000 shall be tax at flat rates.
D) Rs 4,00,000 shall be tax at flat rates.

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CA Sanjay Kumar Agrawal
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——-Answer MCQ Self Challenge # 0067——-

 

Dear Professional Seniors & Friends,

Warm Greetings!

 

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

 

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

 

Answer to MCQ 67.2: C) Rs 2,50,000 shall be tax at flat rates.

 

Practical Analysis for MCQ 67.1& 67.2:-

 

  1. As per Section 112, Tax on Long term capital gains shall be charge 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 non resident individual.
  4. Based on the above analysis, correct answer MCQ 1 : D) Rs 4,00,000 shall be tax at flat rates.
  5. Correct answer MCQ 67.2 : C) Rs 2,50,000 shall be tax 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 professional opinion; you can definitely have your own opinion.)

 

Sincere Regards!

 

CA Sanjay Kumar Agrawal

Mobile: 9810116321

 

To access MCQ posts regularly, please Join Telegram Channel:
https://t.me/caSanjayKumarAgrawal

 

For All MCQ post please click on:

Webpage: http://www.casanjay.me/

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