“NON SUBMISSION OF PAN ATTRACTS TDS @ 20% ”

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Query 1]

I am confused about the ITR form submission. I have income from Salary/Pension and around Rs. 700/- as Short Term Gain (Share) and Rs. 4,500/- as Long Term Gain (Share), Rs. 10,000/- exempt income (from Government towards agriculture loss) and Rs. 65,000/- vested bonus (on maturity) from LIC. Should I fill ITR-1 as major part of income is from Salary/Pension or IRT-2? Please guide. [ravikolhe2011@gmail.com]

Opinion:

ITR-1 (SAHAJ) form can be used by an individual where the total income consists of the following income:
I) “Salaries” or income in the nature of family pension or
II) “Income form house property”, where assessee does not own more than one house property and does not have any brought forward loss under the head; or
III) “Income from other sources”, except winnings from lottery or income from race horses and does not have any loss under the head.
It is Provided that the form cannot be used by HUF or a peson who is a non resident or a person having any assets (including financial interest in any entity) or signing authority in an account located outside India. Also  the person who have claimed any relief of tax u/s 90 or 90A or deduction of tax under section 91 cannot file income tax return in ITR-1. Furthermore, any person who have income not chargeable to tax, exceeding Rs. 5,000/- cannot file income tax return using ITR-1..

In your specific case, you have income from capital gain and also exempt income exceeding Rs. 5,000/. As a result, even though major part of your income consists of salary/Pension income, you have to file the return in ITR-2.

 

Query 2]

I have Fixed Deposit a/c in a nationalized Bank since last three years. My PAN is also with Bank. Up to last year, bank used to issue me certificate for TDS i.e., Form No. 16A with bank manager signature and stamp thereon. This year, bank deducted TDS @ 20% on the pretext that PAN is not recorded in to computer system. Sir, is it my fault? Now, bank is not ready to give me certificate in form no. 16A as my PAN is not incorporated.  20% tax is deducted (TDS) from my account and I may not get Tax benefit. May I file my Tax return with the help of simple computerized certificate (not in Form no 16A) issued by the Bank? What is remedy to get proper exemption? Pl advise.  [Mangesh Chandekar-m.chand1948@gmail.com]

Opinion:

The bank would be wrong if the tax is deducted @ 20% despite submission of the copy of PAN card..Without acknowledgment of PAN submission or any other evidence, it would be difficult for the depositor to argue that TDS @20% is wrongly done by the bank. Advisably, bank should also communicate to the depositor before deducting TDS @20% as PAN is now mostly available with the depositor & they might not have submitted it to the bank.

In your specific case, it is advisable to file the return incorporating the TDS of 20% on the basis of computerized certificate issued to you. For getting the credit of the TDS which is not reflected in your 26AS, you would be required to approach your assessing officer with all the facts and figures and with a request to give credit on the basis of data provided by you. For speedy disposal, it would be better if the bank revises its TDS return by filing revised TDS statement.

 

Query 3]

After the death of my father in Feb.2009, as per his will, I inherited a residential flat in Pune (mother passed away in 1994). I propose to sell this flat now at about Rs. 1.50 Crores. I am resident Hindu Individual. Please clarify:

  1. Will this transaction involve income from capital gains?
  2. If yes, how much income will be considered for taxable?
  3. How is the taxable income computed in such cases? [S.S.Salodkar-

latasudhakar@yahoo.com]

Opinion:

  1. Whether inherited or purchased, such property transactions would yield capital gain income. There is no exception with regard to chargeability of capital gain arising from sale of inherited house property.
  2. Computing Long Term Capital Gain (LTCG):
    Long Term Capital Gain arising from transfer of any long term capital assets (i.e., assets with a holding period of more than 36 months) is to be calculated by deducting the following from the full value consideration:
    (a) Indexed cost of Acquisition
    (b) Indexed cost of Improvement
    (c) Expenses incurred in connection with transfer (like brokerage, legal expenses etc)
    [i.e., In your specific case, Rs. 1.50 Cr or the Stamp Duty Valuation if it is higher than Rs. 1.50 Cr, would be treated as full value consideration.]
    In case of old property acquired prior to 01.04.1981, the Fair market value (FMV) of the property as on 01.04.1981 could be considered as cost of acquisition and it could be indexed to arrive at the indexed cost of acquisition. In absence of all the required details the amount of LTCG could not be worked out.
  3. LTCG is taxable @ 20%. Individual/ HUF tax payer can save tax on LTCG arising from sale of house property by investing the amount of LTCG in a prescribed way & thereby claiming an exemption u/s 54 or 54EC.

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