Ask Anil: Your Tax Queries Answered

'How long will it take to get my refund credited to my account?'

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

---

Diwakar Kulkarni: I am a retired govt servant (retired in 2018) and earn income from pension, annuity, income from one house property and interst+some misc. dividend from shares.

My total income is @15.00 lakhs per annum.

I file ITR 1 online on my own since several years.

I had invested about Rs. 35 lakhs in MFs and stocks which I have not redeemed till date.

How much can I redeem from MFs without going to IT consultant/CA?

Anil Rego: For MF redemptions one need not consider to consult a CA irrespective of value, rather you need to consult a financial advisor to check whether it is a good time to redeem. (except where you are subject to tax audit, which is unlikely).

You need to check on tax implications and exit load before redeeming.

If you are having equity MF, and you are redeeming before 1 year (short term), there can be exit load of 1% and short term capital gains tax on the profit.

(15%) If you are redeeming after 1 year ( long term) then you will have to pay 10% tax on additional 1 lakh on profit on redeeming.

If you are redeeming debt MF less than 3 years, the gain will be taxed as per tax slab and exit load depend on type of funds and if you are redeeming; debt funds above 3 years (Long term), the gain will be taxed at 20% with indexation.

Surcharges would be payable as applicable on the base rate of tax.

How to calculate indexation benefits in ITR?

Anil Rego: You need to compute the indexed cost of acquisition of the capital asset.

You can do this by multiplying the Purchase Consideration of the Asset by the Cost Inflation Index(CII) in the year of sale and divide the CII for the year of purchase.

The CII is published by the income tax department and you can do a web search and you will get the same easily.

Eg. If you bought an asset for Rs 40 lakh in a year when the CII was 12o and sold it for Rs 50 lakh in a year when the CII was 132, your indexed cost of acquisition will be = 40*132/120 = 44.

Ie. Your indexed cost of acquisition is Rs 44 lakh.

The difference between the sale value and the indexed cost of acquisition is the capital gains.

Ie. 50-44= Rs 6 lakh is your capital gain.

venkata chari v s: I am regular reader of your views.

It helps to understand various rules and obligations of a tax payer.

Now I have come across a peculiar situation.

Father of a son, a trekker, went missing during one of his expeditions in Himachal Pradesh.

His wife flew to the last known place from where he called her.

At that place police station, after detailed discussion, newspaper reports, and enquiries a complaint was registered.

Subsequently vast searches were done including aerial search by army, ITBP, Air Force personnel.

He could not be traced.

Police has confirmed that they could not locate but continue to search; two years lapsed already.

Query: In the past two years, various fixed deposits in joint names, either or survivor, have all been encashed by father on maturity.

Father, a sr. citizen, and also tax assessee 30% slab, has paid all taxes against his own income and filed his return against his own PAN no.

But for his son, in line with his (son's) 26AS report, the income tax is paid against his (son's) PAN for the last two years.

A refund is also due in one year.

But ITR 2 could not be uploaded against son's PAN since OTP will be received in his (son's) mobile which is not available.

Father cannot sign as representative as no confirmed report of the failure of searches is available at the moment.

Son's wife, in 30% slab, has filed her return for her income.

No will or POA, or any written authorisation is available.

Please suggest how to proceed.

Anil Rego: Father or spouse can look to register with the income tax department to act as a representative.

The listed circumstances include for a deceased person, mentally incapacitated, etc.

You can look to do so under 'Any other reason'.

You would need to provide the requisite proofs including copy of the FIR and any other such backup documentation.

I would believe that the department would consider your request favorably because you are only making an attempt to comply with regulation.

Once the person is approved as a representative, one can file the returns of the missing person.

You can reach the income tax department through their customer care numbers or the PRO at their offices.

In absence of you getting an approval, do keep all the backups of communication and attempts made and continue to pay the taxes and maintain the computation of income for future reference.

This would be a practical approach to take.

Ramachandrareddy Gadi:How long will it take to get my refund credited to my account?

Anil Rego: The ITR processing takes 30-45 days.

Refunds usually take 20-45 days after the processing is done by the income tax authorities.

You can check the status of your return online on the Income Tax department website.

---

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.

Feature Presentation: Ashish Narsale/ Rediff.com