Section 88E of Income Tax Act "Rebate in respect of securities transaction tax"
88E. (1) Where the total income of an assessee in a previous year includes any income, chargeable under the head "Profits and gains of business or profession", arising from taxable securities transactions, he shall be entitled to a deduction, from the amount of income-tax on such income arising from such transactions, computed in the manner provided in sub-section (2), of an amount equal to the securities transaction tax paid by him in respect of the taxable securities transactions entered into in the course of his business during that previous year:
Provided that no deduction under this sub-section shall
be allowed unless the assessee furnishes along with the
return of income, evidence of payment of securities
transaction tax in the prescribed form:
Provided further that the amount of deduction under this
sub-section shall not exceed the amount of income-tax on
such income computed in the manner provided in sub-section
(2).
(2) For the purposes of sub-section (1), the amount of
income-tax on the income arising from the taxable securities
transactions, referred to in that sub-section, shall be
equal to the amount calculated by applying the average rate
of income-tax on such income.
(3) No deduction under this section shall be allowed in, or
after, the assessment year beginning on the 1st day of
April, 2009.
Explanation.-For the purposes of this section, the
expressions, "taxable securities transaction" and
"securities transaction tax" shall have the same meanings
respectively assigned to them under Chapter VII of the
Finance (No. 2) Act, 2004.