Write short notes on exemption of capital gain under section 54 F.(10 marks) (150 words)
Answers
The following are the rules for grossing up interest on securities:
If the rate of interest is given, only the interest of tax-free commercial securities is grossed up and interest on all other securities is not grossed up.
Interest on tax-free commercial securities is always grossed up. whether its rate per cent is given or the amount received is given.
Interest on less tax securities is grossed up only when the amount received is given.
It has to be noted that the taxable income from interest on securities is (i) net interest received by the security-holder plus (ii) the amount of income tax deducted at source or paid by the authority responsible for paying the interest directly into the government treasury on behalf of the security-holder
Write short notes on exemption of capital gain under section 54 F.