Your queries: Income Tax; Income from US employer taxable under ‘salaries’ head

The requirement to file a tax return is governed by Section 139.

Your queries: Income Tax; Income from US employer taxable under ‘salaries’ head
Transfer of shares by the late-father to his son as per former’s will is not liable to income tax.

By Chirag Nangia

My employer is US based and the salary is directly credited to my account in India from the US account. What is the applicable tax rate and under which section of the Income-Tax Act do I need to file the returns? And if I show this amount as professional fees and not as salary then what would be the applicable tax rate?

—Arpit D. Gujarathi

Your income from a US employer would be taxable under the head ‘salaries’ at ordinary slab-rates applicable to resident individuals. The requirement to file a tax return is governed by Section 139. Income arising from exercise of a profession is also taxable at ordinary slab-rates. However, gross professional receipts may be reduced by the amount of actual expenditure and permissible capital allowances, if any, incurred in the course of earning professional income, and only the net-income (after deductions) may be brought to tax.

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l My uncle died and left the shares in his demat account to my cousin in his will. I am named as the nominee for the shares. Once I receive the shares in my name, I will transfer them in my cousin’s name. Do I have to pay income tax on the shares transmitted to my names and when I transfer it to my cousin?

—Vinoo Daniel

Your demat account acts as a mere conduit for transfer of shares in your cousin’s name as per your uncle’s will. Transfer of shares by the late-father to his son as per former’s will is not liable to income tax.

l Could you advise if a person who sells his existing flat held for 10 years and uses that money within three years to book a new flat in a new project launch, will all the long term capital gains on old flat sale still be fully exempt?

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—Ashiesh Kapoor

The new flat must be purchased either one year before or two years after the date on which capital gains income accrues to the taxpayer. In case of self-construction, the period is three years. In effect, the taxpayer must have an instrument or registered-deed or any other credible evidence to prove that the funds have been invested under his ownership in a new residential property.

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

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