I was abroad for some time and hence missed the date for filing of tax returns. Now what are my options? Can I file a tax return now? If so, would there be any penalty or fine payable?

?Avinash Choudhari

For FY 07-08, you may file a tax return till March 31, 2009 without having to pay any penalty. However, if any tax were payable by you, interest @1% pm will be payable from March 31, 2008 onwards, till such time that you actually pay the tax.

I have purchased 50 shares of Reliance (RIL) at INR 2,674 in May 2008 through off market transactions through one of my relatives. As you would be aware, on account of the current levels of RIL, I intend to sell them through an online service (with STT) and claim short-term capital loss, which I can set off against future short-term capital gain.

I also intend to purchase 50 RIL shares at current market prices again. Will this be the right decision with respect to tax treatment and investment?

Also, I have Reliance Power shares at the IPO price (INR 460) and have received the subsequent bonus. Can I only sell my initial IPO shares through FIFO method? Can I also take the current market price into account (CMP) for calculating STCL? (INR 460-CMP)

?Ravi Palande

The answers to both your questions are in the positive. In both cases, you may book short-term capital losses. CMP has to be used in all cases, whether the shares are ex bonus or not. If and when you sell bonus shares, the cost would be taken as nil.

Your intention to purchase fresh RIL shares has no bearing on the above tax treatment.

I live in the US with my husband and both of us are NRIs. We recently bought two plots of land in India. My husband?s name is the ?First Name? in sale deeds of both the plots and mine is the ?Second Name?. I have the following questions:

1. Are the plots subject to Income Tax in India?

2. Are they subject to Wealth tax in India?

3. If so, how do we file the tax returns from the US?

4. Do we need PAN numbers in order to file the returns or are NRIs exempt from having PAN numbers?

5. Does it matter whose name is First Name in the sale deeds of the plots. My husband funded the plots, I am a housewife. However, the plots were funded from our joint account.

?Nalini

The initial exemption limit for wealth tax is Rs 15 lakh. Beyond this value, wealth tax is payable @1% on the value of the assets. The plots will not be subject to income tax. PAN is mandatory in order to file a tax return and NRIs are not exempted from the same. Since it is your husband who funded the plots, his name being that of the first holder is appropriate and in order. Your name being second is for convenience and has no implication either for income tax or for wealth tax.

I am a 44-year-old woman. My husband is working in a bank. In the banks records, I am dependent on him. I am primarily a housewife. However, over a period of the last 6-7 years, I have earned some money (not regular) on my own by engaging in some irregular work like taking tuitions, conducting cooking classes and yoga classes. The amount earned varies from Rs 30,000 ? Rs 40,000 per year. It was my own effort on account of my professional competence. At times, I have also received small amounts as gifts from my father. I have an affidavit to this effect from my father. A good part of these earnings was invested by me in KVP and Mutual Funds. I also have a PAN. However, I have never filed IT returns as my income was never above the threshold exemption limit.

I now want the following clarifications from you –

What I understand is that the amount earned by me by virtue of my professional competence, cannot be clubbed with my husband?s income for income tax purposes. I will be liable to pay tax and file returns if my income crosses Rs 1.80 lakh p.a. as per the present exemption limit for women. My husband is an income tax payee and he pays the tax without including my income. I think this is legally correct. However, some persons have advised me that the income earned by me because of my professional competence will be clubbed with my husband?s income because I am dependent on him. Please clarify.

?Nandita Rajput

Your understanding is perfect. For clarity, we reiterate that what ?some persons? have told you is entirely wrong. You can have some earning of your own and still be dependent. Only the income earned by you from the corpus gifted by your husband will be clubbed. Another clubbing provision is applicable in case you receive a salary from your husband on an assignment for which you do not have any expertise and specialised knowledge. But the money actually earned by you on account of your competence is not taxable in his hands.

The authors may be contacted at wonderlandconsultants@yahoo.com