Your I-T Returns Questions Answered!

rediffGURUS Hardik Parikh, Tejas Chokshi, Mihir Tanna and Sanjeev Govila answer your tax related queries.
Ask them your questions HERE.

Rayees: Hello sir. I am working in a private firm and I am getting gratuity every month as salary component so how take income tax exemption on gratuity which I am receiving every month in salary

rediffGURU Hardik Parikh answers: Hello Rayees.

I understand your query about the tax exemption on the gratuity amount you're receiving as part of your monthly salary.

Gratuity is a benefit given by the employer to employees. As per the recent amendment, gratuity is now tax-exempt up to Rs 20 lakh, which is an increase from the previous limit of Rs 10 lakh. This comes under Section 10(10) of the Income Tax Act.

However, it's important to note that if an employee receives gratuity during his service, then it is fully taxable as income under the Income Tax Act, 1961. The exemption applies when the gratuity is received at the time of retirement or termination, not during the service period.

I would recommend consulting with a tax advisor or a chartered accountant to understand how this applies to your specific situation and to plan your taxes accordingly.

I hope this information is helpful to you.

• Ask rediffGURU Hardik Parikh your question HERE.

Anonymous: Tejas ji, I am a teacher by profession.

Last FY, I opted for the old tax scheme and using all available options brought my taxable income to just under Rs 5 lakhs. So no TDS was deducted by my employer.

However, in March 2023, I withdrew Rs 65000 from my tax saver mutual fund due to urgent needs.

Can you please tell me if there is any tax due coz of this withdrawal? Which ITR form do I need to file this year?

rediffGURU Tejas Chokshi answers: You may file either ITR- 1 or ITR-2 depending on the complexity of the income.

Yes, the lock in period of three years applies on ELSS schemes and if withdrawn before that it would attract taxability.

Please look at the detailed note below, which would be helpful to you.

Withdrawal from Tax Saver Mutual Fund: If you made a withdrawal of Rs. 65,000 from your tax saver mutual fund, it's important to note that withdrawals from equity-linked saving schemes (ELSS) are subject to tax implications.

~ ELSS investments have a lock-in period of three years. Withdrawals made before the completion of the lock-in period are considered as short-term capital gains.

~ ITR Form: Since you are a teacher by profession, your income is likely from salary and other sources. If you do not have any business income, you would typically file your income tax return using ITR-1 (Sahaj) or ITR-2, depending on the complexity of your income sources.

~ ITR-1 (Sahaj): For individuals having income from salary, one house property, other sources (like interest income) and total income up to Rs 50 lakh.

ITR-2: For individuals and Hindu Undivided Families (HUFs) not eligible to file ITR-1 and having income from salary, house property, capital gains, more than one house property, etc.

• Ask rediffGURU Tejas Chokshi your question HERE.

Anonymous: Dear Mihir , I am salaried employee and have been filing my ITR return since 10 years under Form 1 (which is fairly simple).

Last FY for the first time I sold out some of my equity shares and that makes me ask you following --how to report LTCG and STCG in the Form 2 (This form looks very comprehensive comparing to Form 1).

Could you please simplify the steps involved to report my above Capital gains and conclude my return before 31st July?

rediffGURU Mihir Tanna answers: If you file ITR in online mode, in capital gain schedule you will find two options to report STCG and LTCG.

STCG is covered in Sec 111A and LTCG is covered in 112A wherein you can provide the required details. You are also required to provide quarter-wise details of gain in the given schedule.

• Ask rediffGURU Mihir Tanna your question HERE.

Umesh: At what rate the interest earned on ICICI children growth bond is taxed?

rediffGURU Sanjeev Govila answers: This fund has been designed to provide the amount for your child's wedding, higher education, etc.

There are two components in the maturity amount. One is the principal and the other is interest.

There is no tax on the principal amount.

However, interest earned here will be added to your income and will be taxable as per the slab rates.

Ask rediffGURU Sanjeev Govila your question HERE.