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Old 29th August 2015, 10:59   #751
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I have few shares held overseas (part of employee share save). I get dividend on these after deducting tax in UK. Is UK covered under double tax avoidance agreement so that I can set off tax already paid in UK and only pay residual tax amount?
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Old 29th August 2015, 11:30   #752
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The ITR2 is quite complex piece of file with as much as 10 sheets in the file to be filled. It would be definitely a nightmare to fill the columns (in green) and very difficult to understand which greens to fill. I did that and uploaded the same to IT website. I was about to celebrate my success when my colleague called me to ask about the 26AS (Interest from FD). I checked my 26AS credit statement and found that I had received almost 15K of interest in 2014-15 FY. Re worked the ITR2, paid the additional tax online. Now the Income and tax were matching. Now the question was whether I should file this as revised return or Original. My CA friend advised that Original can be filled only once and any changes has to be filled as revised. I hope thats correct. Filed the returns again, got it e-verified. I sincerely hope thats the end of it.
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Old 29th August 2015, 11:39   #753
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

If you have filed the original then it will only accept modified. Ack or not does not matter.
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Old 29th August 2015, 13:01   #754
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

On the same lines interest that accrues in a fd or value that accrues in a mutual fund aren't taxed - what gets taxed is of interest or maturity amount from the fd is credited to your bank account or if you redeem the mutual fund units

You then show it as capital gains or income from other sources as the case may be

Not when it is accumulating in your account

It isn't income unless it's in your hands

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Originally Posted by binand View Post
I haven't been as my understanding was that the interest income need be declared only if I make a withdrawal from my PPF account. After seeing your message I did a web search; there are adherents to both schools of thought. Let this forum know if you get an authoritative answer for this question.
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Old 30th August 2015, 11:18   #755
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Originally Posted by binand View Post
I did a web search; there are adherents to both schools of thought. Let this forum know if you get an authoritative answer for this question.
It is choice that can be made by taxpayer. All incomes (Except salaries, income from house property and capital gains) can be accounted for on either cash or accrual basis. Salary, House income and capital gains must be accounted for on accrual basis.

Specifically on PF, this is mostly theoretical unless PF is withdrawn in less that 5 years. (PF interest is not taxed).

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Originally Posted by hserus View Post
It isn't income unless it's in your hands
This method has a hidden cost. Bank will anyway deduct TDS on accrual basis, even if payer chooses cash basis for accounting. This causes various complications. Rule 37BA(3)(i) drives it.

Some of the complications:

1. All IT systems assume accrual as default basis for tax on bank side as well as tax side. Cash accounting has higher chance of triggering scrutiny that can't be closed by system and personal visits would be required.
2. In theory "TDS deducted" and "TDS claimed" can be for different FYs. But processes do not account for it (E.g: 360 profiling processes that flag late filers, non filers etc).
3. Payer cannot switch from cash to mercantile in future for same "source" of income.
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Old 31st August 2015, 00:02   #756
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Originally Posted by NetfreakBombay View Post
..Salary, House income and capital gains must be accounted for on accrual basis.
What does this mean? Especially for capital gains

I have made lot of notional capital gains (short/ long term) from MF and Stocks.

I am simply staying invested. I am not paying any tax until I actually redeem something and get a credit in my bank.
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Old 31st August 2015, 08:11   #757
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Originally Posted by NetfreakBombay View Post
It is choice that can be made by taxpayer. All incomes (Except salaries, income from house property and capital gains) can be accounted for on either cash or accrual basis. Salary, House income and capital gains must be accounted for on accrual basis.
That was my assumption all these years as well (my PPF account goes back to '02 or so). I was scared I'll have to re-do the returns for many years now. :-)

Though I must say, I hardly think that capital gains has to be accounted for on accrual basis. That would mean every year I have to look at my entire stock/mutual portfolio and pay taxes based on current price/NAV, which obviously nobody does.
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Old 31st August 2015, 08:12   #758
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Originally Posted by S_U_N View Post
What does this mean? Especially for capital gains

I am simply staying invested. I am not paying any tax until I actually redeem something and get a credit in my bank.
I think (I am not a CA or finance professional), this would be just selling the investment and receiving the credit on your account. Unless you sell it on 30th march, and receive money on 2nd April, it should not matter.

Income tax has given pointers on how apply these rules to specific cases, not sure if they have anything on Mutual Fund/ Shares etc.

http://www.incometaxindia.gov.in/Tut...ial-status.pdf


Rule :

Quote:
The method of accounting followed by the assessee has no relevance while computing income charged to tax under the heads “Salaries”, “House property” and “Capital gains”
Example: (Income from House Property is always taxed on accrual basis)

Quote:
Mr. Kapoor owns 3 flats which are rented by him. He is maintaining regular books of account to record his rental income. He maintains books of account on cash basis.

In this case rental income will be charged to tax under the head “Income from house property ”.

It can be observed that Mr. Kapoor is following cash system of accounting for recording his rental income. However, for the purpose of computing income charged to tax under the head “House property”, the method of accounting has no relevance and, hence,income charged to tax under the head “House property” will be charged to tax as per the provisions given in sections 22 to 27.
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Originally Posted by binand View Post
I hardly think that capital gains has to be accounted for on accrual basis. That would mean every year I have to look at my entire stock/mutual portfolio and pay taxes based on current price/NAV, which obviously nobody does.
IT document that I had linked is pretty clear that capital gains must e accounted on accrual basis. I think definition of "capital gains" is not based on NAVs.

(I am not a CA)this might be applicable on more complex scenarios such as :

1. Selling funds at loss in one year and carrying forward losses to next few years (allowed for up-to 8 years I think)
2. Dividends from schemes such as Liquid/Money Market Schemes (dividends from equity funds are tax free)

Last edited by NetfreakBombay : 31st August 2015 at 08:31.
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Old 31st August 2015, 11:57   #759
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Originally Posted by NetfreakBombay View Post
I think (I am not a CA or finance professional), this would be just selling the investment and receiving the credit on your account. Unless you sell it on 30th march, and receive money on 2nd April, it should not matter.

Income tax has given pointers on how apply these rules to specific cases, not sure if they have anything on Mutual Fund/ Shares etc.

http://www.incometaxindia.gov.in/Tut...ial-status.pdf
Thanks for the document. It does not cover the scenario that I was interested in unfortunately.

One good note in there is about PIN money given to wife. There is no upper limit specified.
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Old 31st August 2015, 12:26   #760
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1. Selling funds at loss in one year and carrying forward losses to next few years (allowed for up-to 8 years I think)
Sigh. I have done this in the past. Need to look at the returns for those years once again, I suppose.
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Old 7th September 2015, 16:02   #761
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

Just a few minutes back, I received this sms from ITD CPC:

Name:  Screenshot_20150907155221344.jpeg
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Size:  38.3 KB

ITD CPC has really become super-fast in refunding!

Last edited by J.Ravi : 7th September 2015 at 16:08.
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Old 7th September 2015, 17:46   #762
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Quote:
Originally Posted by hserus View Post
On the same lines interest that accrues in a fd or value that accrues in a mutual fund aren't taxed - what gets taxed is of interest or maturity amount from the fd is credited to your bank account or if you redeem the mutual fund units

You then show it as capital gains or income from other sources as the case may be

Not when it is accumulating in your account

It isn't income unless it's in your hands
Hi,

I filed my ITR online on 1st Sep 3am as "after due date"

Now the due date was extended to 6th. Should I file a revised ITR now as "on our before due date" ? Or just let it slide?
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Old 7th September 2015, 20:22   #763
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

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Originally Posted by sgiitk View Post
If it is overbooked and deposited then the refund will come. So go ahead and file.
Checked on this. If Overbooked, then it means that the employer /deducting entity has deducted from assesse and has not deposited that with IT dept. Hence IT dept will not clear the returns till such time the overbooked amount is either paid to IT dept, or the F-26AS is corrected.

Further, with an un-clean F-26AS, if one does still file, it will be the assessee who will have to run around to clear things when the IT dept returns the return.

Bottom of the story - do not file returns unless F-26AS is clear.
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Old 8th September 2015, 12:04   #764
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Originally Posted by J.Ravi View Post
ITD CPC has really become super-fast in refunding!
Just a few minutes back, I got the refund credited to my bank account. This time, they have credited more than what I had asked for. Earlier, I received the detailed assessment order too. Fantastic job.
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Old 8th September 2015, 12:17   #765
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Originally Posted by J.Ravi View Post
Just a few minutes back, I got the refund credited to my bank account. This time, they have credited more than what I had asked for. Earlier, I received the detailed assessment order too. Fantastic job.
On which date had you submitted your ITR / e-verified your ITR?
Was it ITR1 or ITR2/2A?
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