l In the new tax regime, I do not have to show any deduction. But I get rental income. Can I claim 30% deduction on rental value?—Subash Giri
Under the new tax regime i.e., Section 115BAC of the Act, an individual can continue to claim the standard deduction of 30% on the net annual value of a rented property while computing income under the head “Income from House Property”. Notably, house tax (municipal taxes actually paid) is also deductible from gross rent, irrespective of tax regime. In other words, no further deductions (such as interest on home loan under section 24(b)) are available in the new regime unless for let-out property, subject to specified limits.
l How should I report loss from derivatives trading and set it off from gains in the cash segment?—Amit Jaiswal
Losses from derivative trading are classified as non-speculative business losses under Section 43(5). In the same assessment year, it can be set off against any other non-speculative business income, including profits from cash segment trading (if treated as business income). Any unabsorbed business loss can be carried forward for eight assessment years, subject to return filing within the due date under Section 139(1).
l I am a freelance architect. What is the maximum limit for business expenses if I opt for presumptive income tax filing?—Mohit Sardana
As per Section 44ADA, a self-employed architect can opt for the presumptive taxation scheme if the gross receipts from the profession do not exceed Rs 50 lakh in a financial year. However, where the aggregate amount received in cash does not exceed 5% of the total receipts, the enhanced threshold limit of Rs 75 lakh applies. Under this scheme, 50% of the gross receipts are deemed as taxable income, and no further deduction for business or professional expenses is permitted beyond the presumptive portion.
l If I give Rs 25 lakh to my sister, will she have to report the money in the ITR and will it reflect in AIS?—Pankaj Kumar
‘A gift from one sibling to another is fully exempt under Section 56(2)(x) Act since a “sister” qualifies as a relative. However, your sister should disclose the receipt in her ITR under the “Exempt Income” schedule for transparency. High-value transactions routed through banking channels may reflect in the recipient’s Annual Information Statement (AIS)/Statement of Financial Transactions (SFT) depending on the reporting thresholds of banks; therefore, retaining documentation (bank proof and gift deed) helps reconcile the AIS if it appears.
The writer is tax partner, AKM Global, a tax and consulting firm. Send your queries to personalfinance@financialexpress.com
