l I have a joint property with my mother. We will sell the property. I am a salaried employee and my mother gets a government pension. How will we calculate the capital gains and how will we divide the tax?—Ritesh Gupta
Under the Income-tax Act, 1961, where an immovable property is held jointly, the capital gains arising on its transfer are required to be computed and taxed separately in the hands of each co-owner, in proportion to their respective ownership interest in the property. The decisive factors for computation are the ownership share as evidenced by the title deed or other contemporaneous records, the period of holding and the consideration attributable to each co-owner. The personal source of income of the co-owners whether salary or government pension is irrelevant for capital-gains purpose.
Accordingly, the total sale consideration is first apportioned between you and your mother in the agreed ownership ratio. Each co-owner will compute capital gains on their respective share after deducting the proportionate cost of acquisition (with indexation benefits, where applicable) and eligible transfer expenses. The sale proceeds and the corresponding tax liability will be borne independently by each of you, and the capital gains will be reported in your respective returns of income. Each co-owner may also separately evaluate eligibility for any available exemptions or reliefs under the Act based on their individual facts.
l I have made some gains from trading. Since I missed the advance tax deadline of December 15, can I pay now and the rest by the end of March?—Pramod Kumar
Under the Income-tax Act, 1961, an assessee is obligated to discharge advance tax where the net tax liability for the relevant financial year exceeds Rs 10,000, after adjusting for Tax Deducted at Source and Tax Collected at Source. Advance tax payments especially for capital gains are required to be paid in prescribed installments, computed on the basis of income earned during the year, including income from business or trading activities. The statutory payment milestones are June 15, September 15, December 15 and March 15, corresponding to cumulative payments of 15%, 45%, 75% and 100% of the estimated tax liability, respectively.
Where an assessee fails to remit advance tax in accordance with the prescribed schedule, the shortfall may still be paid subsequently, including any time up to March 31 of the financial year. However, such deferment attracts interest under Section 234C, levied at 1% per month or part thereof till 31st March, i.e., for four months in this case from December till March.
