Short-term capital loss can be carried forward only if you file Income-Tax returns on time

Written by Suresh Surana | Updated: Sep 10 2013, 16:59pm hrs
I am a salaried person. During FY13, I sold some shares, which I had held for nine months, on the stock exchange at a loss. I could not file my Income-Tax returns before the due date. Will I be able to carry forward the losses

Prakash Madan

Any short-term capital loss on sale of listed shares (i.e., those held for less than 12 months) are eligible for carrying forward and set-off against future gains under the same head of income, if you file your return of income within the prescribed due date. Since you had not done so, you cannot carry forward the loss.

I earned salary income of R4,95,000 and interest income from savings bank account of R3,000 (which has been reported to my employer and tax deducted thereon) in FY13. Can I claim exemption from filing return for FY13

Jagdip Singh

You cannot claim exemption from filing the return of income, as according to the latest press release issued by the ministry of finance, there is no such exemption for FY13. As the due date for filing the return has already passed, it is advisable to file it before March 31, 2014, to avoid any penalty.

I am a risk-management consultant working in Mumbai. I received certain fees from my clients who did not deduct TDS. Do I need to pay advance tax

S Govind Rao

As you have received fees without deduction, you will be liable for payment of advance tax in respect of income that has been received without deduction, in case your advance tax liability is R10,000 or more. The advance tax liability will be payable in three installments ending on September 15 (wherein 30% of the advance tax liability is to be paid), December 15 (wherein up to 60% of the advance tax is to be paid) and March 15 (wherein 100% of the advance tax is to be paid). Also, any deferment or default in payment of advance tax will result in levy of penal interest at prescribed rates.

I am planning to sell a residential house in December from which I expect capital gain of R90 lakh. I bought the house in 2006. Kindly suggest some tax-saving avenues.

Deepak Ahuja

As you purchased the house more than three years ago, the gain on its transfer will be treated as long-term capital gain. In respect of long-term capital gain, reinvestment benefits under Section 54 of the Income-Tax Act, 1961, for investment of capital gains in new residential house is available. Another option, to claim exemption under Section 54EC, is by reinvesting the capital gain in eligible NHAI/REC bonds within six months of the date of transfer. The maximum amount that can be invested in such bonds is R50 lakh per financial year. If you are able to invest in two different financial years falling within a six-month period, you can even claim exemption up to R90 lakh.

I made an FD of R1 lakh in the name of my minor daughter from a gift received from her mother. The FD earns R8,500 a year as interest. Will this income will be clubbed in my or my wifes income

Ashok Chandrasekhar

As per Section 64(1A) of the I-T Act, an income accruing to a minor child will be clubbed in the income of the parent having greater income (excluding the income to be clubbed). As such, the income of R8,500 will get clubbed in either your or your wifes income, depending on who earns more. An Exemption of up to R1,500 under Section 10(32) will be available.

The writer is founder of RSM Astute Consulting Group

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