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Bob is a single taxpayer. He has other taxable income of 430,000 (i.e., in addition to...

Bob is a single taxpayer. He has other taxable income of 430,000 (i.e., in addition to the facts below and note that he has no credits) in 2020. In addition to that taxable income of 430,000 Bob has qualifying dividends of 50,000 as well as the effects of each of the following transactions (assume all from stocks). LTCG 190,000 LTCL (40,000) STCG 7,000 STCL (17,000) Compute his 2020 tax.

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Answer #1

As per Indian Income Tax

Total taxable Income = 430000+[(LTCG-LTCL)+(STCG-STCL)

= 430000+[(190000-40000)+(7000-17000)]

=570000

Total tax:

On LTCG= 140000*20/100=28000

+cess @4% =28000*4/100=1120

Total tax amount on LTCG= 28000+1120=29120

Dividend is tax free in hand of shareholders.

Income available for slab system = 430000 but slab system covers tax free income less than Rs. 5Lakh.So 430000 is tax free.

Total tax to be paid by Bob for 2020 as per Income Tax Act is Rs. 29120.

Country for taxation not specified in the question.

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