Query 1]

Sir, what is the right procedure to compute Income Tax on MCX transactions (Profit or Loss)? Is it a speculative profit or loss? Income of a salaried Senior Citizen from Salary and all other sources is Rs. 2 Lacs. His profit from MCX transactions of Silver is Rs. 75,000/- & from Sugar is Rs. 25,000/-. What will be his tax liability? [srf.fatnani@yahoo.co.in]


  1. The Central Government has notified NSE, BSE, MCX stock exchanges & United Stock Exchange of India Ltd as a recognized stock exchange for the purpose of section 43(5) as a result, the profit/loss in MCX is not considered as a speculative profit/loss. The expenses incurred like brokerage, transaction charges are deductible expenses while working out the profit/ loss from the transactions.
  2. The total income of the senior citizen mentioned in the query is of Rs. 3 Lacs. It is presumed that the income pertains to the F.Y. 2010-11 & there is no amount admissible for deduction under chapter VIA (LIC, PPF, etc). With this presumption, the total tax liability would be Rs. 6,180/- after considering the basic exemption limit of Rs. 2.40 Lacs & education cess @3%.

Query 2]

I have a salary income and I have filed my salary income return for the F.Y. 2010-11 on dated 29/07/2011. I have shown salary income only & I had failed to show capital gain income in the F.Y. 2010-11. Now I intend to show the capital gain income also. My question is can I file revise return showing both incomes? [rahulkr9970@gmail.com]


The original return (29.07.2011) is filed by you before the due date of filing the return of income (i.e., 31.07.2011). You have an option to file the revised return u/s 139(5) of the Income Tax Act – 1961. Revised return can be filed before the expiry of one year from the end of the relevant assessment year (i.e., before  31.03.2013) or before the completion of assessment whichever is earlier. You are advised to rectify the mistake by filing the revised return at the earliest.

Query 3]

Sir, I am a Central Government Servant. So far, I was availing the benefit of my yearly LIC premium of about Rs. 58,500/-, towards a LIC policy having sum assured of Rs. 10 Lacs. Will I be able to get the same benefit after Direct Tax Code is implemented after 1.4.2012, at least partially? How do I plan my tax savings; since currently my savings are the above LIC premium, PF and VPF only.



Under the proposed new Direct Tax Code also, the deduction towards LIC premium is admissible. Originally in the DTC, the EEE system ( Exempt Exempt Exempt) was proposed to be replaced entirely by EET system ( Exempt Exempt Tax) of taxation. However, Revised Discussion Paper on DTC released by CBDT in June-2010 has reiterated the EEE ( Exempt Exempt Exempt) system of taxation for approved Life Insurance Products in the DTC regime. However, the final law of DTC, the date of Applicability, etc has not yet been confirmed. We will try to cover the implications of DTC in due course of time.

Query 4]

I am a very senior citizen (Age-93 years) with annual income less than INR 5,00,000/- from Government Pension + Savings Interest + FD Interest from S B I. Since the income-tax on income up to INR 500000 is NIL, would I need to file ITR for F.Y. 2011 – 12 (A.Y. -2012-13)? I have no other sources of income except as stated above. Kindly advice. [jrwitthal@gmail.com]


You would not be required to file the return of income for the F.Y. 2012-13 as the basic exemption limit in the case of very senior citizen (80 years & above) is Rs. 5 Lacs.