Share sale gain is taxed at 15%

QI am a senior citizen aged 65 year and a pensioner. I receive my pension through Canara Bank, Bengaluru. I am charged TDS by the bank on pension paid to me. I would like to know from you whether TDS falls under the category of advance tax or some other category. If it falls under the advance tax category, why am I being charged with this as the senior citizens are not required to pay advance tax. Canara Bank has refused to accept my argument. If it is an unauthorised deduction, can I ask Canara Bank to pay me four per cent interest on sums wrongly deducted?

A) If the pension received by you is in excess of the threshold limit (after taking into consideration the deductions under chapter VI-A) specified under the Income-Tax Act, TDS needs to be deducted on the excess by the payer and deposited with the department. The advance tax provisions are different from TDS provisions and are not applicable to the senior citizens, who are resident in India without having business income during the year. The deduction of tax in your case appears to be appropriate. However, if TDS is more than the tax you are liable to pay, you claim the excess amount as a refund from the income-tax department by filing tax return.

If the shortterm capital gains arise from dealing in shares through a stock exchange, where Securities Transaction Tax (STT) is charged at the time of sale, the gain will be charged to tax at the rate of 15 per cent u/s 111A

A) In the instant case, the entire income that is chargeable to tax after exhausting the basic exemption against interest income comprises of only short-term capital gains. If the short-term capital gains arise from dealing in shares through a recognised stock exchange, where Securities Transaction Tax (STT) is charged at the time of sale, the gain will be charged to tax at the rate of 15 per cent under Section 111A.

No deduction under Section 80C can be claimed in respect of such income under the head capital gain arising from the sale of shares through a recognised stock exchange where STT is charged at the time of sale in view of restriction under Section 111A(2). You may alternatively choose to claim deduction under Section 80C against income from bank deposits.

The amount after such deduction may be reduced from the basic exemption limit and such balance left after the basic exemption which is not adjusted against bank deposits may be set-off against the short-term capital gains and the balance, if any, will be charged to tax at the rate of 15 per cent in accordance with section 111A.

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QSRIDHAR SHUKLA Via mail

In the current year 2019-20, my wife has earned `4,35,300 — which comprise of short-term capital gains of `3,65,200 from trading and investments in shares through stock exchange and `70,100 as interest from bank deposits. Please tell me if the basic exemption can be exhausted against the short-term capital gains earned. What is the rate of tax is applicable if this income is taxable. Is she eligible for deduction under Section 80C against the short-term capital gain?

SATYA SAI Via email

My father is senior citizen. He is spending `5,000 for purchasing his medicines every month. How can he show this expenditure in his ITR filing for claiming deduction? JITHENDRA Via email

A) Deduction for money spent on medical treatment can be claimed by an individual under Section 80DDB. But the deduction is available only for diseases prescribed in I-T rule 11DD(1).

The payment for the treatment of such diseases or ailment should have been made by himself. In case of HUF, it can pay for any of its members.

The assessee is required to obtain the prescription for such medical treatment from a civil surgeon.