By Neeraj Agarwala

I gifted a property valued at around Rs 2 crore to my elder daughter last year after paying the stamp duty. Now she has got an income tax notice. How should she reply to the notice?—Brijesh Pant

Gifts from parents to their children are exempt from tax under Indian income tax law, as they are classified as gifts from “specified relatives.” Your daughter can respond to the income tax notice through the income tax portal under the ‘Pending Actions’ tab. She should navigate to ‘Response to Outstanding Demands,’ select ‘Disagree with Demand,’ and provide an explanation stating that the transaction is exempt from tax. It is essential to attach a copy of the gift deed executed during the transfer, clearly indicating that the property was gifted without consideration as a genuine gift.

l I had filed my income tax return on July 15 this year after verifying 26AS. Now I have got a demand for `5000 for interest payment for PFC bonds. Do I have to pay the demand and file revised returns?

—Ramesh Yadav

First, carefully review the demand notice to understand the exact reason for the demand. Verify if there was an omission in your original return with actual income data and not just Form 26AS. If you agree with the demand and acknowledge that the interest income was not reported, you will need to pay the demand amount of `5,000. Payment can be made through the income tax portal. In case you believe that the demand is incorrect, you can disagree with the outstanding demand through the income tax portal and provide reasons for disagreement. Note that in either case, there is no need to file a revised return and a reply to the outstanding demand can be made directly from the income tax portal dashboard under the Pending Actions tab.

l Apart from salary income, I made some gains last month on one time F&O trading. Do I have to pay capital gains in advance this year?

—name withheld

Gains from F&O trading are treated as business income rather than capital gains under the Income Tax Act. Since F&O trading gains are treated as business income, they are subject to taxation at the applicable slab rates based on your total income. If your outstanding tax liability (including the tax on salary income and F&O gains), after TDS, exceeds Rs 10,000 for the financial year, you are required to pay advance tax in applicable instalments during the year.

The writer is partner, Nangia & Company. Send your queries to fepersonalfinance@expressindia.com