Questions on Income Tax?

Question

1. Do I need to prepare a balance sheet if my only source of income is Salary, Bank interest and Shares.

2. How do u calculate tax on shares?(Both for less than a year and more than a year). What happen to the shares that are still unsold on 31st March? How do u show them in balance sheet?

3. If you buy a property do you need to show it in ur balance sheet in the same year? Or its only during selling the property? What about if you get the property as gift?

4. If I gift some money to my wife and she does some business with it and generate an income out of it (let say by bank interest or share trading), will that income get clubbed with my income? Or her income can be calculated separately and taxed separately as an individual?

7. Can the loss in "short term gain" be carried forward into next year? Can it be adjusted with long term gain?

8. Can the loss in "long term gain" be carried forward into next year? Can it be adjusted with short term gain?

Answer 1

1. No

2. On income tax return, you report total sales amount and total purchase amount. Only shares sold are reported.

Read about Capital gains, computation of capital gains and income tax rates on capital gains: http://mytaxes.in/index.php?topic=30.0.

Answer 2

No need to prepare the balanche sheet for income from salaries and capital gains.

Tax on shares is called Captial gains - If u hold the shares for a period of more than 1 year and then sell it, then you are exempt from paying tax for the gains.  However if u make the gains from stocks that u hold for less than a year, you have to pay a flat rate of 10% on the gains as Short term Capital gain Tax.