Your queries: Rs 20 lakh revised gratuity limit for retirements after March 29, 2018

By: |
Published: August 21, 2018 12:57:14 AM

The revised gratuity limit is applicable for retirement after March 29, 2018 and not before this date. Since you retired on September 30, 2017, the limit of Rs 10 lakh for gratuity exemption shall be applicable for you.

Presumptive Taxation Scheme, Section 44AD,  Section 44ADA ,  Section 44AE, Income Tax ActAnother drawback in these presumptive taxations in the case of partnership firms is that partners’ interest and salary are not allowed as deduction.
  • Rs 20 lakh revised gratuity limit for retirements after March 29, 2018 l I received Rs 11,75,000 as gratuity on my retirement on September 30, 2017 of which Rs 1,75,000 was taxable. Now the gratuity limit has been revised to Rs 20 lakh on March 28, 2018. Am I eligible for tax rebate or not? —Mahesh Jain

The revised gratuity limit is applicable for retirement after March 29, 2018 and not before this date. Since you retired on September 30, 2017, the limit of Rs 10 lakh for gratuity exemption shall be applicable for you.

  • I am a professional aged 68 years. My professional fee is paid to me and TDS is deducted at 10%. I had been filing returns via ITR-4 till FY 2015-16. But for FY 2016-17, I used ITR-3. Can I file my returns for FY 2017-18 via ITR-4? —Veera Chawla

For AY 2018-19 you must use Form ITR 3 for filing your Income tax Return. However, you can file Form ITR 4 if you avail the benefit of Section 44ADA. As per this section, if your gross receipts are less than `50 lakh, then 50% of your gross receipts is treated as your professional income. Also, it must be noted that benefit of Section 44ADA can only be availed by certain specific professions like legal, medical, engineering, architecture, accountancy, technical consultancy, interior decoration, etc.

  • I trade in securities and also maintain books of accounts. After taking balances of portfolio as on March 31 at the prevailing price, I calculate profit as well as notional loss for whole year. Will the profit worked out be a business income or capital gain. If it is business income, can I go for filing ITR 3? —Sheela Jajoo

CBDT has issued various clarifications from time to time (Instruction no. 1827 dated 31-08-1989, Circular No. 4/2007 dated 15-6-2007 and Circular No.6/2016 dated 29-02-2016) on this issue in the light of various rulings. As per these clarifications and rulings, it has to be decided on various factors like time and efforts devoted, frequency of transactions, etc. The Circular No. 6/2016 states that if you want to treat this income as business income, you can do so and the tax authorities may not challenge it. You have stated that you are spending time frequently in trading of securities, hence you can treat such income as Business Income and then file your return in Form ITR 3.

The writer is partner, Ashok Maheshwary & Associates LLP. Send your queries to fepersonal finance@expressindia.com

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1Mutual Fund Investment: 6 criteria of picking the right mutual fund
2Received income tax notice? Here is what it means and what you need to do
3Credit Score: 10 amazing ways a good credit rating can help you in financial markets