ITR may be required in order to claim refund of TDS deducted, if any, if income is below the basic exemption limit.
By Chirag Nangia
I want to invest in bank fixed deposits. The amount will earn interest of Rs 30,000 in three years. Will TDS be deducted by the bank?
– P Gupta
A person shall not be required to file income-tax return (ITR) if the income earned during the year is below the basic exemption limit. However, ITR may be required in order to claim refund of TDS deducted, if any, if income is below the basic exemption limit. In such a scenario, TDS can be avoided by filing a self-declaration in Form 15G with the bank stating that estimated total income during the year including the interest would be below the basic exemption limit and hence no TDS should be deducted. Further, the Interim Budget 2019 increased the limit prescribed for deduction of TDS on interest from Rs 10,000 to Rs 40,000. Thus, in case the interest earned by you on FD falls within the limit of Rs 40,000, no TDS would be deducted and consequently, you would not be required to file ITR. TDS on interest gets deducted on the accrual of interest and not just at maturity of the FD.
My son has an Non Resident Ordinary account and uses a part of the account money to meet his travel and shopping expenses when he comes to India. The balance funds are used by me and my wife to meet our living expenses. How will the amounts received from our son be treated by income tax authorities?
Any sum of money received from relatives is fully exempt from income tax without any limit. Money received from non-resident relatives shall be treated as gifts from relatives and shall be exempt from tax. However, you have to disclose your exempt gift income under the head ‘exempted income’ in ITR whereas your wife shall not be required to file ITR.
I sold my joint property on September 2, 2018 and was supposed to buy 54EC bonds before March this year. I issued cheque to HDFC for 54EC-REC bond on March 28, but sale representative forgot to upload documents. What should I do?
Capital gains under section 54EC are exempt from income tax if it is invested in long-term specified asset (including REC bonds) within a period of six months from the date of transfer of long-term capital asset. Amount invested after six months from the date of transfer of capital asset shall not qualify for exemption of capital gains and such amount shall be taxable as income under the head ‘capital gains’.
(The writer is director, Nangia Advisors LLP. Send your queries to firstname.lastname@example.org)