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Old 19th April 2012, 23:34   #181
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Default Re: Long term capital gains from selling house property

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Originally Posted by tsk1979 View Post
Thanks for your detailed reply! I guess I have to purchase the flat in the same year in which I sell the old flat, and there is no account thingy issue too
One final query. Builders take money as completition happens(floor by floor some x %). So lets say I have 20L capital gain.
I give 5L to dealer now, and then 1L every 3 months.
Flat completition is after 3 years. Will I be in trouble with income tax department for buying an under construction flat which will come up after 4-5 years?
I am glad I was able to help and I guess even I should thank you for sharing that beautiful travelogue of yours.

It does not matter whether you pay in lumpsum or in installments. As long as the gains are used for purchase of another house property within specified period you can claim the exemption. Just ensure that the money is kept seperately or can be identified specifically in your bank account for the sake of maintaining a record that it was not used for any other purpose.

With regards to time frame for completion of construction, the act has expressly stated 3 years. Complete it in 3 years or lose your exemption. If you still want to claim exemption even if the construction will not be over in 3 years, I would advise you against it although people often do it. As far as trouble goes then I would only say that Income Tax Department has ways and means to locate your transaction via AIR.
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Old 20th April 2012, 00:26   #182
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Default Re: Long term capital gains from selling house property

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I am glad I was able to help and I guess even I should thank you for sharing that beautiful travelogue of yours.

It does not matter whether you pay in lumpsum or in installments. As long as the gains are used for purchase of another house property within specified period you can claim the exemption. Just ensure that the money is kept seperately or can be identified specifically in your bank account for the sake of maintaining a record that it was not used for any other purpose.

With regards to time frame for completion of construction, the act has expressly stated 3 years. Complete it in 3 years or lose your exemption. If you still want to claim exemption even if the construction will not be over in 3 years, I would advise you against it although people often do it. As far as trouble goes then I would only say that Income Tax Department has ways and means to locate your transaction via AIR.
Oh!
This is a bummer
Often builds say posession within 3 years, but often delay project by a year or so.
I guess if we pay the builder in advance, (atleast the profit amount in advance), then no problem.

For example, lets say profit was 10L
New flat cost = 40L

So I pay builder 10L right away, and then keep paying the balance as linked by construction. That should be okay?

Or do the rules say your new home should be ready to move in and constructed within 3 years of sale of old flat?
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Old 20th April 2012, 09:07   #183
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Default Re: Long term capital gains from selling house property

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Originally Posted by tsk1979 View Post
Thanks for your detailed reply! I guess I have to purchase the flat in the same year in which I sell the old flat, and there is no account thingy issue too
One final query. Builders take money as completition happens(floor by floor some x %). So lets say I have 20L capital gain.
I give 5L to dealer now, and then 1L every 3 months.
Flat completition is after 3 years. Will I be in trouble with income tax department for buying an under construction flat which will come up after 4-5 years?
Quote:
Originally Posted by tsk1979 View Post
Oh!
This is a bummer
Often builds say posession within 3 years, but often delay project by a year or so.
I guess if we pay the builder in advance, (atleast the profit amount in advance), then no problem.

For example, lets say profit was 10L
New flat cost = 40L

So I pay builder 10L right away, and then keep paying the balance as linked by construction. That should be okay?

Or do the rules say your new home should be ready to move in and constructed within 3 years of sale of old flat?
The act states 3 years which means by end of three years the construction must be granted OC by the local authority, for this implies that all activities associated with construction are over and the house is deemed to be fit for occupancy.

The builders have state the exact date by which they will hand over the possession of the property to the owner in the agreement and they also have to specify that in case of failure to allot the possession in specified time what will be monetary compensation that the buyer is entitled to. However, be careful and read the fine print carefully for I have seen even the most reputed builders in Mumbai reporting to arm twisting tactics to avoid paying the interest in case of delay.

Having said that I feel that we may have a window of opportunity here. If the agreement with your builder states that the possession will be granted within 3 years then we can go ahead and claim the exemption. If the builder extends the date let it be. And in case the assessing officer hauls you up, we can argue that our intentions in claiming the exemption were bona fide and in spirit of the law since the agreement stated that possession will be granted within 3 years, however due to circumstances beyond your realm of control i.e. Builder's fault or inefficiency,the period got extended. So I feel that in above scenario we can claim the capital gain exemption. In future if the AO tries to mess around with you do not worry, PM me or post your query and I will suggest you ways to tackle him.
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Old 20th April 2012, 09:44   #184
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Default Re: Long term capital gains from selling house property

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Originally Posted by Bookkeeper View Post
........ Just ensure that the money is kept seperately or can be identified specifically in your bank account for the sake of maintaining a record that it was not used for any other purpose.
You will have to open a Capital Gain account with any of the banks for this till the time you utilize this money to buy the new house.

Have a look at this link. De-jargoned | Capital Gain Account Scheme - Money Matters - livemint.com
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Old 20th April 2012, 10:10   #185
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Default Re: Long term capital gains from selling house property

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Originally Posted by rishab.k View Post
You will have to open a Capital Gain account with any of the banks for this till the time you utilize this money to buy the new house.

Have a look at this link. De-jargoned | Capital Gain Account Scheme - Money Matters - livemint.com
Well he intends to use the entire gain to purchase the property in the same PY before filing the return. And if you read my earlier posts I have indeed mentioned Capital Gain Deposit Scheme.
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Old 23rd April 2012, 12:50   #186
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

Hello the following is my issue:

1) I get a demand letter from IT department about arrears for unpaid tax for AY 2007-08.

2) I was in Bangalore for that FY and moved to Pune in the last quarter.

3) I had no tax dues for that year, but instead should get a refund and filed returns in August 2007.

4) Baffled, I approached a tax consultant. Showed him the demand letter I got, the ITR acknowledgement and asked him to solve the issue.

5) He gets back to me saying that, someone from Bangalore filed a return with my PAN number in July 2007 itself. And with salary two times that of my salary then. So TDS was not matching and hence the arrears. And that the issue CANNOT be resolved from Pune IT office, but from Bangalore IT office.

6) Tax Consultant in Pune has no branches in Bangalore and he cannot help. So if someone from Bangalore refer me to a good consultant, I would be grateful!
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Old 20th May 2012, 20:09   #187
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

Experts please comment on my problem, I am yet to receive the refund from IT Dept, I will paste below the status:


Status of your tax refund

Permanent Account Number (PAN)
Assessment Year 2010-2011

Mode of Payment Reference Number Status Date*
ECS 0000000000 Adjusted against outstanding demand. (CIN-BSR code 0004329 Challan deposit date - 06072011 Challan Sequence no - 02484) Jul 7, 2011


Do you know what could be the problem here? I have filed returns for the previous assessment year (2009-2010) & I have no dues to pay as per the E-acknowledgement received from the department over my email.
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Old 20th May 2012, 21:31   #188
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

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Originally Posted by Mr_Bean View Post
ECS 0000000000 Adjusted against outstanding demand. (CIN-BSR code 0004329 Challan deposit date - 06072011 Challan Sequence no - 02484) Jul 7, 2011
Looks like, it says adjusted against outstanding demand. Could you have some other income like interest, where TDS was deducted but you did not include in your return or something? You might want to get in touch with the department for your assessment orders.
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Old 20th May 2012, 22:10   #189
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

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Originally Posted by Mr_Bean View Post
Experts please comment on my problem, I am yet to receive the refund from IT Dept, I will paste below the status:


Status of your tax refund

Permanent Account Number (PAN)
Assessment Year 2010-2011

Mode of Payment Reference Number Status Date*
ECS 0000000000 Adjusted against outstanding demand. (CIN-BSR code 0004329 Challan deposit date - 06072011 Challan Sequence no - 02484) Jul 7, 2011


Do you know what could be the problem here? I have filed returns for the previous assessment year (2009-2010) & I have no dues to pay as per the E-acknowledgement received from the department over my email.
There is a simple explanation for it and some times it's the system which is lethargic hence the confusion and problems.

Giving you a scenario.

Lets say you have income from your commercial property and your tenants file their tax returns cutting the Tax against your PAN and hand you the TDS.

You file your tax with detailed list of your income and tax paid against it as per your TDS. You calculated your tax (either you owed or not) and filed your TR. When your ITR is processed, the system checks TDS against the info you have provided. IF the details checks out then you pay or get what you filed in your ITR. But sometimes what happens is that the TDS does not checks out on their system. It can be due to wrong PAN no or the tenants had not filed their TR in time which has shown up on their system.

So a demand notice is issued and I guess you would have received one or two previously. Which either got sorted out in due course by itself or you filed a rectification for that if your ITR was filed correctly.

You can check that with your CA who will bring up the info on the screen from IT website or yourself if you file it online yourself.

Once you are sure everything matches up online currently on their system with your previously filed ITR and there is no pending demand. In that case what has happened that somewhere in the Government computer system the old demand is still showing up in the centre where they collect the pending dues and they have not bothered to check the latest info on your previously filed ITR and adjusted the refund on the same or other ITR .

Now what you can do;

Ask your CA to check your last two years ITR and see which year ITR you had asked for that certain amount of refund which now has been adjusted.

Also check the details of your last 2 yrs. ITR and see where the details do not match with your ITR you have in hand.

Once you get the clear picture then file for rectification and sit tight. It can take anything from one month to 6 months for the IT department to sort out the own mess and give your dues.
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Old 3rd July 2012, 15:00   #190
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

With the deadline for filing returns coming nearer, here are some questions I have:
1. Is it true that companies do not cut TDS if the interest earned (in the financial year) is less than Rs. 5000? Here I am referring to the investment I have made in certain company fixed deposits. I don't think they have cut any TDS since the amount is very less.
The interest is still taxable and should be included in self-assessment tax (SAT)

2. Is it true that banks do not cut any TDS for earnings through savings accounts?
Note: I am not referring to fixed deposits, but regular savings account at 4%.
The interest is still taxable and should be included in self-assessment tax (SAT)

3. Is it true that there is no tax on dividends? What about payouts from mutual funds? Are they the same as dividends? Or something different?
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Old 4th July 2012, 02:11   #191
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

hi S_U_N,

1) Correct

2) Correct

3) Dividends from Equity shares and Equity Mutual funds are exempt from tax but you still have to show them in Exempt Income section when filing your IT return. Dividends from Debt / Fixed income mutual funds are taxable.

Last edited by spookey : 4th July 2012 at 02:13.
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Old 4th July 2012, 09:07   #192
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Question Re: All Income Tax Queries (refunds, disputes, rates etc...)

Gurus,

After having sold my flat in Thane and bought a new one I am now entitled to Long term Capital Gains tax. A couple of queries regarding the same:

1) Will I have to mention the LTCG in year 2012-13 IT returns or in 2013-14 as the flat sale/registration happened in April 2012 and new flat purchased/registration in May 2012?

2) Do I have to approach a CA to get the LTCG statement or can I do the calculations on my own? If so any format available for the same, pls do share.

3) Also can I show the Stamp duty + registration cost in the loss from house component in this FY year i.e 2012-13 IT returns.
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Old 4th July 2012, 10:02   #193
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

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Originally Posted by spookey View Post
3) Dividends from Equity shares and Equity Mutual funds are exempt from tax but you still have to show them in Exempt Income section when filing your IT return. Dividends from Debt / Fixed income mutual funds are taxable.
Thank you spookey.

I am trying to locate where I need to show this. In ITR 1, on tab number 3, there is a single row:

26 Exempt income for reporting purposes only

Unfortunately, this does not allow me to specify anything other than some amount. Where do I put in the description, date or other details?


Edit:
What about bonds like NHAI (tax free) and IFCI (non-tax free)?
I have received a certain amount from both these (Rs. 382 and Rs. 1600) respectively.
Where do I declare these two?

Last edited by S_U_N : 4th July 2012 at 10:04.
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Old 4th July 2012, 10:16   #194
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

Experts, Please help me with these questions.

1. While calculating Short term capital gains from securities, what are considered as expenses? STT paid during the Buy & Sell transactions? or Brokerage paid also can be included? I am using the https://myitreturn.com site to file my returns. STCG section of this portal asks for expenses incurred during the sell transaction, but not in the Buy transaction. Bit confused about this.

2. Last year I decided to break away from regular employment, and resigned from the company I worked for 19 years. I am 44yrs old. Gratuity was paid along with the final settlement and after 3 months, I withdrew my full PF balance also. I understand that both PF & Gratuity are fully exempt from IT. Now, how do I show these two items in the returns? I guess I should show them under Exempt Income. But I don't see any specific heads for these two. All I can see are: Interest Income, Dividend Income, Long-term capital gain, Net Agriculture Income AND Others. Should I show my PF & Gratuity under "Others"? Will this be good enough? The Form-16 given to me post resignation DOES NOT include gratuity & PF (I guess that was because they were not taxable).

Thanks in advance..
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Old 5th July 2012, 12:24   #195
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

@spookey, and others:
Please provide quick help.
I need some quick answers on the previous post (193).
One more question:

Since my wife and minor child are not earning any income, I believe any interest generated in their account is also clubbed in my income.
Where do I declare these details in the ITR form?
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