Anil Rego: Your Tax Queries Answered

'Does stamp duty paid in a particular year needs to be claimed in the same financial year?'

Anil Rego, CEO, Right Horizons, answers your personal income tax queries

Srinivas Varanasi Rao: I am filing IT return for retired in laws who are getting pension. Whether standard deduction worth 50000 and exemption of interest u/s 80TTB are available to them?

Other than above, what other exemptions are available for them? Please advise.

Anil Rego: Senior citizens are allowed a standard deduction of Rs 50,000 on account of their pension income. Also u/s 80TTB, senior citizens who are residents of India will have to pay no tax on their interest earned up to Rs.50,000/- in a financial year.

Other exemptions specific to senior citizens include:

Under Section 80 D, the senior citizens are offered a benefit on account of payment of the health insurance premium up to Rs.50,000/-.

No Advance Tax: While ordinary individuals pay an advance tax if their tax liability is Rs 10,000/- or more in a financial year, senior citizens are free from this burden unless they make income from business or profession. Those not owning a business have to pay the Self-Assessment Tax only.

Allowance on the treatment of specified diseases: Under section 80DDB of the Income Tax, senior citizens get a deduction limit of Rs.1 lakh if they undertake any treatment for specified disease/critical illness in a financial year.

Gandikota Narendra: Due to coronavirus pandemic I am not able to go to work in Kuwait. I am NRI and have been filing returns for the last few years. I have FD in banks as NRE account and get interest income. My question is whether this interest income is taxable for RNOR status?

Anil Rego: It appears based on the information given in your query that you intend to go back to work in Kuwait. In such case, Interest on NRE FD (Fixed Deposit) and/ or NRE savings account is not taxable as per the provisions of Section 10(4) of the Income Tax Act 1961.

Vivek Rodrigues: I am a salaried person. As per the IT rules, I understand that interest on fixed deposit till Rs 10000 is tax free and above Rs 10000 TDS is at 10%. All the interest I got from my FDs is shown on my prefilled ITR I as additional income thereby increasing my taxable income. Is there any way to show the non-taxable Rs 10000 interest on fixed deposit to lower my tax?

Anil Rego: You seem to have got mixed up with the deduction of Rs 10,000 on Savings Bank accounts. You cannot avoid adding the FD interest to your income.

chris francis: Sir, i would like to know from your source a few queries regarding income tax, firstly stamp duty paid in a particular year needs to be claimed in the same financial year? Secondly whether Stamp duty can be claimed above the 150000 under 80C CLAIM?

Anil Rego: Yes, you can claim a deduction for Stamp duty only in the same Financial Year as the payment of the stamp duty. It cannot be carried forward.

Also, the deduction for Stamp Duty comes under section 80C. The maximum deduction amount allowed for all the options provided under this section (including for stamp duty) is capped at Rs.1,50,000 for the financial year.

Anil Kashyap: I purchased a house in October 2019 by availing a home loan. I wished to sell a couple of other properties to receive a LTCG rebate. Due to Covid-10 for a large part of the 365 days LTCG period, I could not sell my properties to set off against the LTCG. Is there any concession of 1-2 years to such people who could sell properties to avail this benefit? Kindly advise me at the earliest, Sir.

Anil Rego: The date for making investment/ construction/ purchase for claiming roll over benefit/ deduction in respect of capital gains under sections 54 to 54GB of the IT Act was extended till September 30, 2020 due to Covid. If not complied within this period, you lose the benefit.

A SRI RAMA KRISHNA: I have some queries, which may kindly be advised:

1. If a person stays in India for a period less than 182 days and also less than 120 days and his total income after claiming standard deduction of 50,000 from Indian salary, deduction u/s.80C being PPF investment of 150000, 80CCD of 50000, 80D of 30000, does not exceed 15,00,000 for F.Y.2020-21, what will be his residential status? 

Anil Rego: As per the amended rules applicable from April 1, 2020, if the total income of an Indian citizen is over Rs 15 lakh, then relaxation in number of days visit to maintain their non-resident status is reduced to 120 days. If your visit is less than 120 days, you will be able to maintain your NRI status. In case of total income is less than or equal to Rs 15 lakh, you can maintain NRI status if your stay outside India is for more than 182 days.

2. In the above circumstances, whether he can claim all the deductions as mentioned above? 

Anil Rego: Non-residents can also claim deductions while filing their income tax returns (including the deductions mentioned by you). 

Shyamal V Mehta: I have HUF which was partitioned in October 2020 as a result of which I received some shares from HUF demat account to my individual demat account. I have the following queries, regarding LTCG of the shares received by me from HUF in my individual demat account by way of partition:

1. In ITR-2, for LTCG, Schedule 112A, Column 8, Cost of acquisition - if the shares are transferred to my individual demat account from HUF demat account and then if they are sold, do I write the cost acquisition as on the date they were transferred to my individual account or the cost of acquisition as on the date on which they were acquired by HUF account after 31 January, 2018 but before October 2020 (prior to partition)? 

Anil Rego: Cost of acquisition will be considered as on the date on which they were acquired by HUF account (after 31 January, 2018 in your case). 

2. In ITR-2, for LTCG, Schedule 112A, Column 8, Cost of acquisition - if the acquisition cost of shares (transferred from HUF demat account to individual demat account) acquired prior to 2018 is not available/known do I put "0" in column 8? 

Anil Rego: It will not matter much as the cost of cost as of 31st January, 2018 will be considered if it is higher. 

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.