Your Queries (Income Tax): Select ITR 2 if you have income under the head ‘capital gains’

September 07, 2021 12:46 AM

In the current assessment year, you may furnish ITR Form 1 instead of ITR 2, if you do not have income under the head capital gains, and you satisfy the conditions for reporting income in ITR 1.

In order to provide the benefit of the simplified process of authentication by EVC to these persons, it has been decided to extend the simplified process of authentication by EVC to these persons also.In order to provide the benefit of the simplified process of authentication by EVC to these persons, it has been decided to extend the simplified process of authentication by EVC to these persons also.

By Chirag Nangia

I am a state government employee. I also invest in the stock market where I get short-term and long-term capital gains. If I do not sell any shares in a particular financial year, which ITR form should I file?
—Elango
ITR 1 is a simple form for resident individuals having total income up to Rs 50 lakh, having income from salaries, one house property, other sources (interest, etc.) and agricultural income up to Rs 5,000. Individuals having income under the head ‘capital gains’, cannot file ITR 1, and must report particulars of income in ITR 2. In the current assessment year, you may furnish ITR Form 1 instead of ITR 2, if you do not have income under the head capital gains, and you satisfy the conditions for reporting income in ITR 1.

I left my job two years ago and paid Rs 1 lakh as recovery charges, as part of the employment agreement. The salary certificate is showing the full amount received and `1 lakh is not shown. Can I deduct it while filing ITR or will this amount be taxable?
—Rajendra kr. Maheshwari
There is no provision under the Income-tax Act to allow deduction of notice pay forfeited by the employer when an employee leaves his job, without serving the due notice period. However, the Income Tax Appellate Tribunal, Ahmedabad, in the case of Nandinho Rebello held that only the actual salary received by the assessee was taxable and the amount received as notice pay could not be taxed as salary income.

The rational decision supports the taxation of only the amount earned and received. Accordingly, you may claim the deduction of Rs 1 lakh and pay taxes on the actual salary received, based on this favorable legal precedent. However, the possibility of litigation cannot be ruled out in the absence of express guidelines.

While filling data in TDS deducted on interest income, the income tax filing website is prompting to select the year of income/tax deducted and in the drop down it is showing years. Should I select the year 2020 even though TDS was paid during FY21.
—Adheer Gupta
The year 2020 represents FY 2020-21 in the tax return form. Therefore, you may choose the year 2020 from the drop-down list in order to proceed with the tax filing process.

The writer is director, Nangia Andersen India. Send your queries to fepersonalfinance@expressindia.com

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