By Chirag Nangia
Can a professional (sole proprietor and not a salaried employee) who opted for the new tax regime last financial year can switch to the old tax regime this year while filing the tax return? And if I do so will I be able to switch again in the future?
— Aditi Gupta
Yes, a professional can opt out of the new regime this year, however, she/he cannot again opt-in ever. This has been laid down under Section 115BAC(5) of the Income-Tax Act. You are required to file Form 10-IE to opt-out of the new tax regime.
If I own one house property in my name and one more as a co-owner and my total income is less than Rs 50 lakh, which ITR form should be used to file returns in FY 2022-23.
—R. Srinivasa Rao
In case you have income from only one such house property, you may file ITR-1, otherwise ITR-2.
I am a retired resident individual having only LTCG on sale of shares/equity mutual funds (covered under Section 112A) and no other income. Can I claim both the LTCG exemption limit of Rs 1 lakh and basic exemption limit of Rs 2.5 lakh for calculating tax payable?
Yes, you can claim both as the exemption of Rs 1 lakh for long term capital gains (LTCG) is over and above the basic exemption limit.
I am a salaried employee. If I realise LTCG by way of sale of equity stock, the amount over Rs 1 lakh is taxable. Now if we have a home loan, can the current year’s LTCG by way of sale of equity stock be considered as exempted for the principal repayment on the home loan? Is this to be considered under Section 54?
LTCG used to repay the principal amount of home loan may be considered to qualify the criteria set under Section 54F of the Income Tax Act, 1961. However, the loan should have been taken within one year before sale of equity stock.
If my profits from the sale of stocks exceed the basic exemption limit of Rs 2.5 lakh will I have to pay both capital gains tax and income tax?
Tax on capital gains is part of income tax. Any long-term capital gains (LTCG) on transfer of listed shares are taxed at 10%, if such gains are in excess of Rs 1 lakh in a financial year and Securities Transaction Tax (STT) has been duly paid. Other LTCG are taxed at 20%. Short term capital gains (STCG) are taxable at applicable slab rates. The rate is 15% if STCG arises on sale of listed equity on which STT has been paid. A resident individual may adjust the basic exemption limit against LTCG/ STCG, after making adjustments of other income. In order to discharge your tax liability, you will have to file Income Tax Return form. You can pay the tax by making payment through an authorised bank or through the internet by availing e-tax payment facility.
The writer is director, Nangia Andersen India. Send your queries to firstname.lastname@example.org