I understand that while filing tax returns, one has to fill the AIR column related to mutual fund only when: “the amount of a single payment towards acquiring units of a mutual fund is Rs 2 lakh or more.” Is this accurate? Recently a mutual fund company changed the face value of many of its debt mutual fund schemes from Rs. 10 to 100. The account statement states clearly “change in face value-out” and “change in face value-in” but the amount involved is more than Rs. 2 lacs. Does capital gain incur because of such transactions? And does this transaction need to reported in AIR?
A G Kulkarni
U/s 285BA read with Rule 114E, the transactions of all persons, including NRIs undertaking any one of the following seven specified financial transactions, equal to or over specified financial limits are required to be reported to the Department through Annual Information Return (AIR) ?1.Cash deposits in a year in any bank SB account Rs. 10 lakh 2.Payments in a year credit card 2 lakh
3.Purchase of units of a Mutual Fund 2 lakh
4.Acquisition of bonds or debentures 5 lakh
5.Purchase of shares 1 lakh
6.Purchase or sale of immovable property 30 lakh
7. Purchase of RBI bonds in a year 5 lakh
From a plain reading of the law, it would seem that the above is applicable to a single payment towards acquiring units of a mutual fund. However, if you find that you have purchased smaller amounts in a fund earlier and the last purchase takes your investment above Rs. 2 lakh, you may voluntarily disclose the same in the interest of full disclosure. If you are not evading tax, there is no harm in making such a disclosure.
In the example mentioned by you, even though the face value changes, the total amount invested would remain the same. So there is no need for disclosing the same once again if it has already been disclosed. There is no capital gains tax incidence on account of the change in face value.
I am an NRI who has retained my Indian citizenship. I sold my agricultural land at Pune in November 2007. Then after consulting with my CA., I kept the indexed capital gain amount in capital gain account with nationalised bank (as per Sec. 54B) to purchase agricultural land within two years from date of sale. i.e. till November-2009. But as of today, I am not in position to purchase agricultural land. So please clarify my following queries.
1. Is it possible to invest entire capital gain amount in non-agriculture assets?
2. Is it possible to purchase the agricultural land after November-2009 without paying the capital gain tax i.e. till which date can I purchase agricultural assets?
3. Is there any other way for capital gain tax exemption Mahendra We do not have good news for you.
Whenever a taxpayer acquired a new asset before the stipulated dates as required u/s 54, 54B, 54D, 54F or 54G it was necessary to reopen original assessments for rectification. These hardships have been eliminated through a special bank account called CGAS. The amount deposited in such an account before the last date of furnishing returns of income (or actual date, if earlier) along with the amount already utilised as required, is deemed to be the amount utilised for the purpose. If the amount is not utilised wholly or partly for the stipulated purpose, then, the amount of capital gains related with the unutilised portion of the deposit in CGAS shall be charged as the capital gains of the year in which the period expires.
The period is two years as stipulated by Sec. 54B (agricultural land to agricultural land). You cannot buy agricultural land after November 2009 for claiming the benefit. For Sec. 54F (asset other than a residential house to residential house) the period for constructing a house is three years. If you construct or buy a residential house under construction which will be ready before November 2010, you will save a part of the tax. Sec. 54F requires the entire net sale proceeds to be reinvested in purchasing a residential flat. You have invested only the capital gains arrived at after indexation, into CGAS. You will get proportional benefit. Moreover, if you were an owner of more than one residential house, on the date when you sold the agricultural land, the benefit of tax exemption is not available to you.
I have let out a roof top of my building to a mobile company and am getting rent for the same. Am I eligible for 30% deduction for income tax purpose as in the case of house property.
Gaurav Jindal
Roof top is not a house. Therefore, you are not eligible for any concessions related with housing properties.
I had invested Rs. 50,000 (premium per annum) in a ULIP when I was working. The policy is in the name of my son who is four years old. I had quit my job to take care of my son and I continue to pay the premiums. My question is can my husband declare this premium for tax exemption as the rest of the premiums will go from his income? Kindly suggest any way for claiming tax exemption as I intend to take a break of at least 3 years to take care of my son.
Leela Kapoor
The deduction u/s 80C is available in respect of premiums paid to any life insurer to the individual, the wife or husband and any child of such individual. In other words, if your husband pays the premium for the FY, the deduction will be available to him, irrespective of the fact you were paying the premiums in the earlier years.