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Taxation: Homi Mistry

Homi Mistry 

Homi Mistry

I have incurred a capital loss of Rs 3 lakh on sale of shares. Am I allowed to set this off? If yes, how?
If the loss is a short-term capital loss (loss on sale of shares that you have held for not more than 12 months), it can be set off against short-term capital gains and long-term capital gains you have during the same year. However, if it is a long-term capital loss (loss on sale of shares that you have held for more than 12 months), such a loss can be set off only against long-term capital gains that you have during the year. If the loss is not fully set off as aforesaid during the same year, the loss can be carried forward and set off against the capital gains that you may have in the next eight years. It is important to note that long-term capital gains, arising out of sale of equity shares on a stock exchange, where the sale has been subject to securities transactions (STT), are exempt from and, hence, the loss from such a sale of equity shares are not allowed to be set off.

I donated close to Rs 1 lakh this year. But, the human resource executive at my workplace says they dont accept donations for calculating liability. How do I get benefits for making these donations?
Benefit for donations that have not been considered by the employer while deducting TDS on salaries can be claimed by you in your income tax return. You can also consider the deduction for such donations while paying advance tax, if any, on your income other than salaries, to avoid a refund being due on your return

I wish to donate a fixed amount (every month) to a charitable trust starting this April. I will be donating approximately Rs 5,000 each to two trusts. How much tax deductions can one claim for charity?
The amount of deduction allowable for donations depends on the institution to which the donation is made. While donations to certain specified charitable institutions qualify for 100 per cent deduction, in case of other institutions, only 50 per cent of the amount donated qualifies for deduction. Donations to a charitable trust approved by the Commissioner of Income Tax would qualify for a deduction of 50 per cent of the amount donated. However, the aggregate donations exceeding 10 per cent of the adjusted gross total income would not qualify for a deduction. Hence, even if you make a donation larger than 10 per cent of your adjusted gross total income, the donation amount eligible for claiming a deduction would be capped at 10 per cent of the adjusted gross total income. In any event, the deduction under section 80G cannot exceed the gross total income.

I started working three months ago and I earn commissions over and above my annual salary. How will the commission income be taxed?
Under tax laws, salary includes commission received from the employer. If you earn commission by virtue of the services you render as a part of your employment contract, such commission will be taxed as salary in addition to your fixed annual salary.

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Today, Homi Mistry, tax partner at Deloitte, Haskins & Sells, answers your questions

First Published: Sun, March 03 2013. 22:25 IST