'Help! Penalised Rs 5k for filing revised ITR'

Do you have any personal income tax query?

Mihir Tanna, Associate Director, S K Patodia & Associates (external link), a chartered accountants firm that offers consultancy, audit and tax services, will answer your queries.

Please mail your queries at getahead@rediff.co.in with the subject line 'Ask Mihir' and Mihir Tanna will answer all your tax queries.

RAJMANI VERMA: I have filed my ITR in due time, but a defective notice came because some payment was not shown at proper place, which is being treated as producing of manipulated details to save tax.

Now I have submitted Revised ITR, but now penalty of Rs 5000 is imposed u/s 234F.

Now what can I do now to waive off this penalty?

Mihir Tanna: Till the time defects in original return are not rectified, income tax will consider as if no return is filed. As you have filed revised return without rectifying defects, your revised return is considered as original return and penalty is levied. If defects of original return cannot be rectified even today, I believe there is no option to waive off penalty.  

Debendra Kumar Samantaray: One Person has both Salary Income and Income from Professional services fees. He had forgotten the Professional Services fees received once only in last FY as he is not a regular service provider but a Service holder and it was not in AIS when he filed the ITR.

He filed ITR-1 instead of ITR-4. He came to know the Income from Professional Services fees from AIS, which was included at the end of August. Now his ITR has been processed but they are not refunding his due. Kindly advise.

Mihir Tanna: In my view, pending refund is nothing to do with escaped income of professional fees. As ITR is processed without any defects, refund will be issued. However, it is advisable to revise return and offer all the income correctly in Income Tax return.

Neeraj Yadav: I booked a house from builder in March 2012 with basic price of Rs 30.89 lakh + gst of around 3%. I paid around Rs 12.37 lakh + gst by July 2012 and balance of Rs 18.52 lakh approx + gst by 31.05.2013 in equal monthly installments.

In March 2016, I paid EDC of approx Rs 1 lakh, Rs 1.43 lakh as freehold charges, stamp duty of Rs 2.27 lakh and registry charges of Rs 0.20 lakh aggregating Rs 35.79 lakh + gst.

Total cost including gst is approx Rs 37.00 lakh. The registry was executed in January 2017. Now, I expect to sell my property in September 2022 at a consideration of Rs 72 lakh. I have the undernoted questions:

1. Shall I get indexation benefit from the date of payments made to the builder or date of registry?

2. Do I need to open capital gains account or can I realise the sale proceeds in my regular savings account and invest the LTCG in the chosen bonds?
3. Do I need to deposit the entire sale proceeds in the notified bonds or only the LTCG after indexation and rest money utilize in whatever way I like without attracting tax? 
4. Will GST be included in the cost of acquisition of my property?

Mihir Tanna: Indexation benefit will be available from the date of payments made to the builder.

If you want to avail tax exemption by investing in bonds, you have to invest amount of taxable capital gain (derived after taking benefit of indexation), in bonds within 6 months of transfer of property.

Accordingly, sale proceeds can be realised in regular saving account and can be kept till the time you invest in specified bonds.

Note: The questions and answers in this advisory are published to help the individual asking the question as well the large number of readers who read the same.

While we value our readers' requests for privacy and avoid using their actual names along with the question whenever a request is made, we regret that no question will be answered personally on e-mail.