'Can a person opting for the new tax regime claim the Rs 1 lakh exemption for long term capital gain on shares?'
Anil Rego, CEO, Right Horizons, answers your personal income tax queries.
Sandeep Sharma: I have two flats. Both are registered in my name along with my wife's name.
We are also co-borrowers of the loan for both flats; however, I have mainly paid the premiums.
Now, the loan for one flat is over and the second one is going on.
The rent from the first flat goes to my wife and the rent for the second one goes to me.
Can we separately file ITR-1 showing income from one house property for each and showing the rent income?
Or I have to file ITR-2 showing two house properties?
Anil Rego: If both of you are the co-owners and if the rent is being received in your respective bank accounts, you can file ITR-1 for each showing income from house property.
Vilas Dattatraya Ajgaonkar: I am retired a senior citizen and get approximately Rs 1.5 lakh income from house rent.
Recently, I sold shares and incurred long term capital gain of Rs 3 lakhs plus.
While filing I-T return, does the I-T software take into account both incomes and calculate my tax liability?
A PPF of Rs 25,000 is my only tax saving investment. Please help me in understanding the whole process.
Anil Rego: Yes, all your income needs to be declared by you and the I-T software will consider both while computing tax liability.
However, the sale of shares is taxed differently under the head Capital Gains, while the rental income will be under the head Income from House Property.
On the long-term capital gain of Rs 3 lakhs, you will taxed at 10 per cent with grandfathering.
You can avail the deduction of 30 per cent on the annual value for your rental income.
You would also get the benefit of deduction of your PPF investment under Section 80C.
Col J K Jauhari (retd): I am an army veteran in receipt of disability pension attributable to service, which is exempt from tax at present.
Where do I show this in the new system of e-filing?
Which form should I use if I have income from FDs, bonds (taxable as well as tax exempt) and capital gains/loss from shares and MF?
Also, there is a variation in interest and dividend income between that shown in Form 26AS and the bank interest certificate. How do I reconcile it while filing my return?
Anil Rego: You can report income under various heads.
You could use the head of Salaries (for pension income), Capital Gains (gains on MFs) and Income from Other Sources (income from FDs, Bonds, Dividends) in ITR-2.
There can be several reasons for variation in interest and dividend income from what is shown in Form 26AS and the bank interest certificate.
Most often, mismatches can be attributed to wrong information provided in the TDS return.
Please approach your deductor to file a revised TDS return after making the necessary corrections, else you are likely to get a notice for the mismatch at a later date.
The income tax department allows an assessee to mention the reason for mismatch in the online portal in answer to a notice sent by the department.
Anil Sood: I am having income from shares and interest income.
I will be becoming senior citizen in current financial year.
As per the income tax rules, I need not pay any advance tax being a senior citizen.
My query is whether I have to pay income tax on March 31 or just before filing my I-T return before the due date.
Anil Rego: If you are a senior citizen as on March 31 and have no business income, then there is no advance tax payment required to be paid by you.
You can file your return and pay tax on the filing date.
Practically, you can pay the tax just before you file your return and include the details of the tax paid in your return.
M R P Nair: Can you clarify whether a person opting for the new tax regime (ie concessional or lower rates of tax) is eligible to claim the Rs 1 lakh exemption for long term capital gain on shares?
Anil Rego: Yes, you can claim the exemption of Rs 1 lakh on long term capital gains under the new regime.
Rajan V N: Can I keep my PPF account active till lifetime to enjoy higher interests by investing small amounts and keeping the account active by extending it for five years every time post the initial 15 years initial period?
Also, can I withdraw the interest accumulated yearly from my PPF account?
Anil Rego: Yes, you can extend your PPF for a lifetime in a block of five years every time.
If you are continuing to make contributions after the extension of your PPF account beyond the first 15 years, you can withdraw upto a maximum of 60 per cent of the accumulated amount at the end of the previous renewal period.
Withdrawals are restricted to one per year.
Do you have any personal income tax query? Please mail us at firstname.lastname@example.org with the subject line 'Ask Anil' and Anil Rego will answer all your tax queries.
Anil Rego is the founder and CEO of Right Horizons, an investment advisory and wealth management firm that focuses on providing financial solutions that are specific to customer needs.
You can find more of Mr Rego's answers here.
Feature Presentation: Ashish Narsale/Rediff.com