Income Tax Return filing season is about to end: How you may still save some tax for FY 2021-22 | The Financial Express

Income Tax Return filing season is about to end: How you may still save some tax for FY 2021-22

With less than half a month left for the due date of the filing of ITR to get over, unless extended, one may be ruing for the missed opportunities of saving taxes.

Income Tax Return filing season is about to end: How you may still save some tax for FY 2021-22
To get the benefits of deductions from taxable income for the Financial Year (FY) 2021-22, tax-saving investments should have been done on or before March 31, 2022.

With less than half a month left for the due date of the filing of Income Tax Return (ITR) to get over, unless extended, one may be ruing for the missed opportunities of saving taxes by making the tax-saving investments on time. This is because, to get the benefits of deductions from taxable income for the Financial Year (FY) 2021-22, tax-saving investments should have been done on or before March 31, 2022.

However, if you have sold your house in FY 2021-22 for a good amount, but haven’t found any suitable house yet to invest the amount and save the capital gain tax, you still have time to act and save the tax.

Capital gain tax on sale of residential properties may be saved in two ways – either by investing in Capital Gain Bonds or by investing the amount in buying up to two residential houses.

In case you have not been able to find a suitable house to buy yet, you may still save the capital gain tax on the property sold by opening a Capital Gain Account with a bank before the due date of filing return and depositing the money, with the condition that you will use the money to buy a house within 3 years.

“If any taxpayer intends to avail the exemption u/s 54 series of the Income Tax Act, 1961 (hereinafter referred to as ‘the IT Act’), the capital gains/ sale consideration as per the requirement of the said section need to be invested in the specified asset therein. However, in case such person has not made the said investment before the date of filing the tax return, he may still be eligible to claim the said exemption provided he deposits the amount equivalent to the cost of the new asset in a Capital Gains Account Scheme,” said Dr. Suresh Surana, Founder, RSM India.

“However, in order to be able to claim such exemption in the tax return for the year, it is necessary that such a deposit need to be made either before the due date of filing the return or actual date of filing the tax return, whichever is earlier,” he added.

However, if you fail to utilise the money to buy another house within the stipulated time limit, you will have to pay capital gain tax eventually.

“It is pertinent to note that the amount deposited in a capital gains account, if not utilised for the specified purpose for which it is deposited within the stipulated time period, the unutilised amount would be subjected to capital gains tax in the year in which the specified period expires/ lapses. Moreover, the said scheme is not applicable where the taxpayer intends to claim the benefit of exemption u/s 54EC by investing in specified bonds,” said Dr. Surana.

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