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Ask Anil: Your Tax Queries Answered

By ANIL REGO
January 28, 2021 08:59 IST
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Anil Rego, CEO, Right Horizons, answers your personal income tax queries.

 

ramesh ar: I had sold an apartment where in I and my wife are joint owners. TDS by the buyer on oversight was done in single name. While filing our returns for 2019/20 the system did not take this into account. 26AS shows single TDS. Can this be modified & corrected to complete my returns. Who & how has it to be done. What are the repercussions if not corrected?

Anil Rego: The capital gains from the transaction needs to be split in the ratio of holding between the joint holders. If the percentage of holding of the joint holders is not specified, it can be split 50:50 for taxation as you are joint owners. There are three options:

  • Go in for rectification: which is cumbersome and also difficult to break up into two challans rather than one
  • A simpler process would be for you to get the buyer to pay an additional TDS in the second holder's name
  • If all payments at the time of purchase were by the first holder, then one could show capital gains in first holder's name. In this case, not further changes are required.

The second option seems to be the most practical even though there is an additional payment made. One could claim a refund of this additional amount or adjust it with tax payable.

Mragank Sharma: I am working in UAE for the past 2.5 years.

I was in India when lockdown was announced and I was stuck in India for more than 6 months until flights were resumed. During lockdown I was employed and was getting salary per month.

My question is whether I'll be considered as NRI or not for FY 2020-21? Also, on what income I'll have to pay tax, is it on my total salary or the amount I'd transferred in India. This is when I'll not be considered as NRI.

Anil Rego: For the year, for NRIs stuck in India, the finance ministry has made norms for determining the residency status. This is by discounting the period of stay in India due to the lockdown.

The period of stay in India due to lockdown will not be counted for determining the tax residency.

A circular to be issued excluding the period of stay of these individuals up to the date of normalization of international flight operations, for determination of the residential status for FY20-21.

The circular says that that those who have been quarantined in India on account of coronavirus on or after March 1, 2020, and departed on an evacuation flight on or before March 31 or have been unable to leave India on or before March 31, their period of stay from the beginning of the quarantine to the date of departure or March 31 will not be taken into account for determining tax residency.

You can check this circular, to verify its applicability to you.

Joaquim D'sa: I am a Resident Indian pensioner, Sr citizen, 78 yrs old owning 2 flats (1 in Goa for self-use and the 2nd one in Mumbai given on rental)

Income for FY 2019-20 as follows:-

  • Gross sal (pension) 474042
  • Income from rental 204000
  • Interest on FD 7904
  • Interest on savings a/c 2075
  • Dividend on listed shares 90
  • Total 688111 (A)

Deductions/exemption

  • Standard deduction 50000
  • PPF contribution 150000
  • Health insurance premium 36582
  • 30 % Annual rental 61200
  • Total 297782 (B)
  • Taxable income A-B 390329 LESS 300000 = 90329
  • TAX PAYABLE 4488
  • Rebate u/s 87A 4488
  • NET TAX Payable NIL

PLS ADVISE ITR FORM APPLICABLE.

Anil Rego: ITR 2 would be applicable.

Amit Salian: I am a salaried employee and worked for a Pvt company. I left the Job is Nov'19 previous year and took a sabbatical for 6 months for my family. 

On my last day, I submitted all my investment proofs and as per my calculations, the final TDS should have been NIL and I should have been eligible for refund of TDS which was deducted in earlier months.

When I received Form-16 for FY1920 on the end of Oct'20, I found they had missed out considering my deduction us/24 (b). Interest on housing Loan was missing and due to which my refund amount was reduced. When I checked with Company, they refused to consider it now and asked me to consider it while filing my ITR.

Please let me know, can I consider the same while filing my ITR and how do I get it considered to save on my tax return?

Anil Rego: Yes, you can. Even though your employer has not considered the same and the TDS has been deducted, you can still get a refund by disclosing the interest on your home loan and any other deductions not considered by your employer, while filing your ITR.

Praveen Godbole: My daughter was NRI for F.Y. 2018-19 as well as 2019-20 and continues to be NRI. She had some income in India during both FYs by way of Dividend/Interest from her investments, as also capital gains from sale of shares/mutual fund units. Her total income during F.Y. 2018-19 and 2019-20 was less than Rs 150,000 from these sources. She was a student abroad during whole of F.Y. 2018-19 while during part of F.Y. 2019-20 (less than six months), she was employed abroad and drew income by way of salary. 

Is she required to file return of Income in India for A.Y. 2019-20 and A.Y. 2020-21?-

Anil Rego: An NRI with Gross Total Income less than the taxable income limit need not file income tax return. However, if your daughter has any of the below, one would need to file returns irrespective of one's Total Income being less than the Basic Exemption limit:

  • Income from Short Term Capital Gains on equity shares or units of equity oriented mutual fund
  • Income from Long Term Capital Gains, which are chargeable to tax

If yes, which ITR forms should she be using?

Anil Rego: Being an NRI, she needs to use ITR-2

Does she have to declare her foreign earned income in her tax return in India for A.Y. 2020-21? She has paid taxes in foreign country with which India does not have DTAA.-

Anil Rego: If she was a resident in India in FY2019-20 as per the tax laws with the required number of days being spent in India, then she need to file income tax return in India for her global income under the respective tax slab. If her residency status is Non-Resident, then she only needs to file returns for her India income.

Ravi S Shankar: I am a Senior Retired person without any Pension. My savings have been invested including in equity shares since year 1982 onwards (now under Demat). However, as I do not remember the initial investment made at cost nor the dates/year, is there a way to get this info now, before effecting sale of equity shares and to compute the applicable LTCG, for IT purposes? Kindly clarify.

Anil Rego: Since these are very old shares, and there was a subsequent regulation of grandfathering for shares bought before January 31, 2018; you would not need the actual purchase rate, but the grandfathered price.To find this price, you can do a web search and get the price as of this date and use it as the purchase price.


Do you have any personal income tax query? Please mail us at getahead@rediff.co.in 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.

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