'Is money received for COVID treatment tax-free?'

'What amount is considered as taxable as I don't have any income?'

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

Uday Bugde: Due to the COVID crisis, I lost my job last year and it was not possible to get a new job also. So I decided to sell my property.

But I am getting the amount in part over a period during the coming year and the agreement of sale will be done once I get the full amount.

Do I have to file ITR as per the amount I receive on financial year basis?

What amount is considered as taxable as I don't have any income but only expenditure?

How much I can save against tax and under which head I have to show declaration?

Please guide.

Anil Rego: Capital gains will be considered only in the year that your sale deed is executed (not just sale agreement), after you get your full consideration as mentioned by you.

It is not to be considered on a financial year basis.

Any money that you receive in an earlier financial year would be treated as an advance.

To avoid tax on the capital gain on the property, you need to either purchase a house one year before the date of transfer or two years after the date of transfer of your house.

For a house under construction, you have three years from the date of transfer.

Your date of execution of your sale deed will be considered the date of transfer of your property.

Another option to avoid tax is to buy 54 EC bonds for a maximum limit of Rs 50 lakhs within six months from the date of transfer of your asset.

Compen2003: If immovable property is sold and there is no capital gain after indexation, is it mandatory to report same in ITR?

In such a case, which ITR required for salaried person?

Anil Rego: The capital gains reporting needs to be done, irrespective of whether you have capital gains or not.

You can file your returns using ITR-2.

Ravishankar: During this COVID-19 pandemic I received some cash and online transfer from my friends and well-wishers.

Also, I received an amount from my employer in my salary which was added to the taxable income.

I read that as per CBDT these funds will not be taxed and I can claim tax exemption.

I wanted to know how to claim exemption as I do not see any appropriate section under which I can claim it?

Anil Rego: If the financial aid received either from your employer or others (with a cap of Rs 10 lakhs if received from others) is for treatment of COVID, the same will be exempt from tax.

In addition, financial aid received by the family members of a deceased person would also be exempt from tax.

Dipesh Thakur: I want to know whether I would get tax exemption for capital gain under Section 54. The case is that I sold the property which was registered in my name but I want to buy the property and get it registered in my wife's name.

She is not working anywhere and a housewife.

Anil Rego: You will be eligible to take the exemption under Section 54 in your own name only and not in your wife's name.

To avail the tax benefit, you can buy the property in a joint name.

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.

You can find more of Mr Rego's answers here.

Feature Presentation: Ashish Narsale/Rediff.com