The Hindu Business Line : Tax liability on two sources of income

From your query, it is clear that you have two sources of income. Income from share market activity can be taxed either as business income or as capital gains.

In other words, if you are a dealer in shares you would be taxed as a businessman and if you are an investor you would be taxed as an investor in which case the tax liability would fall under capital gains. If you have sold through a recognised stock exchange after holding the shares for a year, then your capital gains are exempt from tax.

However, if you sell within a year of acquisition, you have to pay a 10 per cent short-term capital gains tax.

Your salary income of course would be taxable at the applicable slab rates.

Exemption on HRA

I own a house, which I have rented it out.

However, there is a loss from this house in view of the heavy interest payment. I also get HRA and I live in a rented house. What are the tax implications for me?

Balaji, email

You would get exemption on HRA in the manner prescribed. The loss from the house owned by you can be set off against your salary income.

Exemption for HRA and such set off are not mutually exclusive. In other words both are on simultaneously.

S. M.

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