Whenever a property is sold in India, the seller makes a capital gain.
-In the last financial year, I sold my residential flat and received money from an insurance claim after 10% TDS u/s 194DA. I need your help in capital gains calculation, whether I am liable for tax, if so, how much and at what rate. Also guide me how to fill these details in ITR-2 form.
Whenever a property is sold in India, the seller makes a capital gain. If property is held for more than 24 months, then the gains shall be treated as long-term capital gains. Otherwise, the gains shall be short-term capital gains. For computation of capital gains, the sale price shall be reduced by the initial purchase price, cost of renovation and transfer costs. In case it was held for more than 24 months, benefit of indexation shall be available for calculating cost of acquisition and renovation cost. The difference arising shall be taxed at the rate of 20%. You can download the form from the e-fling portal of the income-tax department and fill the relevant details such as your basic details and other details pertaining to the income earned by you. Take the help of a tax professional in case of any confusion.
-I left my job two years back. For assessment year 2016-17 and 2017-18, I filed ITR 1 by giving bank interest details under ‘other income’ column. I am still not working and have no income. Which ITR form do I need to file this year?
An individual is required to file his/her return of income if total income exceeds Rs 2,50,000. If you do not have any income, then you are not required to file Income Tax Return (ITR). However, one may file ITR voluntarily, declaring nil income. You should file ITR-1.
-Since I earn money from fixed deposits, I have to pay extra tax and interest in July at the time of filing returns. What should I do?
All income tax dues will have to be paid by March 31 of the financial year to avoid any interest. Interest income earned during the year has to be added to your income from other sources and tax calculated on total income. Any TDS, deducted by the bank can be adjusted from this tax liability. If you have a large amount of interest income, advance tax may be applicable and you will have to estimate your quarterly tax dues and pay them as per advance tax timelines.
The writer is partner, Nangia & Co LLP. Send your queries to email@example.com