By Chirag Nangia
* I have sold a flat a few months ago and will invest some amount in buying another flat next month. What will be the tax treatment and do I have to show the amount in my ITR?
—Aman Dixit
While selling a capital asset (the residential house property in this case), one needs to disclose and pay tax on the capital gains so earned. Capital gains are computed by subtracting indexed cost of acquisition/stamp duty value (whichever is higher) from the sale proceeds. Both the sale proceeds and the indexed cost of acquisition/ the stamp duty value have to be disclosed in the Income Tax Return form. Further, since you are purchasing another house on sale of a house,you are entitled to deduction under Section 54. Capital gains invested in the new house, may be claimed as deduction. Please seel professional advice for exact calculation of capital gains/ loss and exemption on reinvestment of sale proceeds.
Also read: Budget 2023: Allow taxpayers to claim certain deductions to boost the Alternative Tax Regime
* I opted for the new tax regime. Tax was deducted by my employer accord-ingly. Had I opted for the old tax regime, my tax liability would have been nil. How can I rectify the mistake?
—Anurag Bisht
Under the new concessional tax rate regime, individuals can offer their total income at lower slab rate prescribed, provided they forgo certain specified deductions and exemptions. This regime is optional and the option can be exercised in every tax year if the taxpayer does not have business or professional income. In the absence of information, it is assumed you are a salaried person, not having any income from business or profession. Intimation to employer declaring intention to opt for concessional tax regime shall only be for the purpose of TDS, which cannot be modified during the year. However, at the time of filing the return, one may switch to the old regime. Thus, options at the time of filing of return may be different from intimation made by employee to employer. The ITR Form asks for your choice and tax is computed accordingly. The TDS in excess of the final tax liability (after taking into account deductions/ exemptions), may thus be claimed as refund by opting for the old regime in the ITR.
Also read: How can your parents help you save tax & earn more?
The writer is director, Nangia Andersen Consulting. Send your queries to fepersonalfinance@expressindia.com