By Chirag Nangia
We sold our house in October last year and purchased a new one in February 2019. TDS was deducted by purchaser on the sale and we have deducted TDS for builder. Consideration price of new purchase was higher than the price of sale. While filing tax return which form should I use and can we claim TDS? – Manish
If you do not have any income from business or profession, you can file ITR-2. A person (deductor) who is liable to make payment of specified nature to any other person (deductee) is required to deduct tax at source and remit the same into the account of the government. The deductee from whose income, tax has been deducted at source would be entitled to get credit of the amount so deducted on the basis of Form 26AS or TDS certificate issued by the deductor.
I bought an office property in 2000 in Delhi and I am using it for my business. Now I want to sell it and invest the amount in the 5-year bonds specified under Section 54EC. Will this amount be the entire sale proceeds or only the capital gains amount derived after deducting the indexed cost of acquisition from the sale price? — Sumeet Arora
Upon sale of a long-term capital asset (being land or building or both), if the taxpayer invests the whole or part of the capital gains in the specified assets, within a period of six months from the date of transfer, then proportionate capital gains shall be exempt from tax. Thus, in order to claim the benefit under Section 54EC, the capital gains obtained after deducting the indexed cost of acquisition from the sale consideration have to be invested in specified assets (bonds of REC/NHAI, etc.). Further, the maximum amount that can be invested in the specified assets by the taxpayer is Rs 50 lakh.
You should thus, first calculate your total income and tax thereon. Thereafter, deduct TDS on the property to ascertain the tax payable to the government. Any excess of TDS over the final tax liability shall be refunded to you. In order to claim the credit of TDS you shall have to furnish the correct details of income and TDS in your Income Tax Return. Please note that only the deductee is allowed the credit of taxes and not the deductor. Thus, you shall not be allowed credit for taxes that you have deducted and the same can be claimed by the seller of the property that you purchased.
(The writer is director, Nangia Advisors(Andersen Global). Send your queries to email@example.com)