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Old 15th January 2016, 10:01   #811
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

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Originally Posted by guptavis View Post
You have bernefit of indexation. Check the Cost inflation index for the year you bought the land. assuming you bought the land for 1L in FY 2010-11, CII = 711. you sell for 2L in 2015-16, CII= 1081.
indexed cost is 1L X 1081/711 = 1.52L.
So your capital gain is 2L - 1.52L = 0.48L.


PS: coincidentally this is page 54 of the thread
Thanks a lot Guptavis!

I tried going through below URL for SGB.

http://finmin.nic.in/swarnabharat/so...gold-bond.html

It says below about texation in FAQ.

"
• What are the tax implications on i) interest and ii) capital gain?
Interest on the Bonds will be taxable as per the provisions of the Income-tax Act, 1961(43 of 1961). Capital gains tax treatment will be the same as that for physical gold.
"

It seems we should treat this as physical gold. So the Qs is "is gold purchase exempted under section 54?"
Also, if yes, then whether we have to invest all 2L or only delta 48K as per above example?

Yep.. Good coincidence and good observation too. Section 54 on page 54

Regards
SE
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Old 15th January 2016, 10:54   #812
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

In other queries, I have a question on my mother's income tax return for AY11. It was a paper tax return that was filed. The jurisdictional officer did not credit a large advance tax amount. Instead a claim for 2x that amount has been raised under section 1431a after including interest under sections of 234A/B etc

My question is how should we respond - at 70 i dont want her to run around going to the jurisdictional officer. This is the option on the website:
Name:  taxoptions.jpg
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Can I simply re-enter her tax details afresh as an efiling return? Does that work or something complex is required?

I ask because the ITR itself has many different options and I don't know which "returns filed under section" should I use.
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Many thanks in advance for the help.

I have another query on behalf of another relative. He is now a work from home consultant for a US company with no India presence / entity. He gets paid in INR (converted from USD) every month by that company. He has been told by a few folks that he needs to open an EEFC account and instead get paid in USD to avoid having to pay service tax on his income. Google is not very helpful here. any leads? Thanks in advance for this query as well.

Last edited by phamilyman : 15th January 2016 at 10:55.
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Old 15th January 2016, 11:22   #813
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

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Originally Posted by phamilyman View Post
I have another query on behalf of another relative. He is now a work from home consultant for a US company with no India presence / entity. He gets paid in INR (converted from USD) every month by that company. He has been told by a few folks that he needs to open an EEFC account and instead get paid in USD to avoid having to pay service tax on his income. Google is not very helpful here. any leads? Thanks in advance for this query as well.

Hi phamilyman,

Can you please mention the nature of work he is doing. That would be required to know the applicability of service tax.

Requirement of the law is that money should be received in convertible foreign exchange for the export of service. In this case, considering that the services he provides qualifies as export of service which is exempt from payment of service tax, one can hold an account in INR and still get an FIRC (Foreign Inward Remittance Certificate) from the bank to prove that the funds were received in convertible foreign exchange (since the money remitted from US would be converted to INR). This is enough to say that money was not received in INR and was in convertible foreign exchange.

If you feel, this is a bit technical let me know, I would try explaining in simpler words.

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KK
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Old 15th January 2016, 17:23   #814
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

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Originally Posted by speed_edge View Post

It seems we should treat this as physical gold. So the Qs is "is gold purchase exempted under section 54?"
Also, if yes, then whether we have to invest all 2L or only delta 48K as per above example?
If its not covered u/s 54 there is no benefit for capital gains tax. if you buy physical gold it does nothing to your tax.
So if GSB=gold then you have to add Rs 48K in your income under the head capital gains and pay tax on it. (or invest in some other sec54 investment to avoid tax)

Quote:
Originally Posted by phamilyman View Post
In other queries, I have a question on my mother's income tax return for AY11. It was a paper tax return that was filed. The jurisdictional officer did not credit a large advance tax amount. Instead a claim for 2x that amount has been raised under section 1431a after including interest under sections of 234A/B etc

My question is how should we respond - at 70 i dont want her to run around going to the jurisdictional officer. This is the option on the website:
Attachment 1460865

Can I simply re-enter her tax details afresh as an efiling return? Does that work or something complex is required?

I ask because the ITR itself has many different options and I don't know which "returns filed under section" should I use.
Attachment 1460867
Many thanks in advance for the help.
For the demand raised for AY11-

Is the advance tax shown in Form 26AS for that year?

If yes, then simply send a copy of that form 26AS along with a simple letter describing the issue above and put something like " request for rectification u/s 154 for PAN-ABCDEXXXXF AY 2010-11" in the subject, to your jurisdictional AO via registered post or speed post. Also send a copy of the ITR-V acknowledgement for that year (the page that you get back as receipt). They should carry out the rectification and reduce demand to NIL.
In the demand response choose "disagree" and " rectification request filed with AO".

If it does not show in form 26AS then you have to slug it out with the bank where you deposited the advance tax first (but im assuming this wont be the case) and then do the above.

You cannot file a new return now as return has to be filed "within one year of the end of the relevant assessment year" i.e. for FY2009-10 which is AY2010-11 return can only be filed/revised till 31.03.2012.

PS: For the service tax issue you should ask in a service tax thread (if there is one) as its completely different from Income tax.

Last edited by guptavis : 15th January 2016 at 17:25.
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Old 18th January 2016, 11:29   #815
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Hope this is the right thread for this question. What are the implications of buying a car (~10L ex-showroom price) with ready cash (no loans) from the income-tax dept stand point? I heard/read some where that any ready cash purchase (>5L) details are forwarded to the income tax dept by the dealer and IT dept then audits the previous returns filed and/or financial details against the given PAN number etc? Though I am a tax payer and file my returns with out fail, as any other aam-janata person, I would also like to avoid a scanner from any govt dept (especially IT dept). Can any one please advice on this specific angle of ready cash purchase? Thanks.
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Old 18th January 2016, 12:12   #816
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

@psvinay; We have bought cars many times with cheque payment (no loans) valuations over 5L (even over 10L) and never had an inquiry from the IT chaps till now. The last time we had an inquiry was in 1996 when my father got one regarding our Esteem. His reply, Tylical of him was, 'I think I pay enough income tax to justify this purchase, and details will be given in my annual income tax return'. Remember he was Physician with reportedly the highest declared income of any doctor in UP! No murmur after that.
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Old 18th January 2016, 13:59   #817
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

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Hope this is the right thread for this question. What are the implications of buying a car (~10L ex-showroom price) with ready cash (no loans) from the income-tax dept stand point?
If by ready cash you mean physical currency notes, then I expect the black money triggers will kick in. If you pay from the bank (cheque/DD) then all is fine. IT department does not have the resources to deal with each individual transaction; they run a fairly sophisticated BI system which picks cases for further scrutiny based on aggregated information. If your returns are in order and the system thinks that you have sufficient income and liquidity to buy that car without a loan, then no problem.
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Old 18th January 2016, 16:10   #818
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Thanks @sgiitk, @binand. Ready Cash, I mean payment through bank only.. For the past several years, I pay tax in the upper tax slabs only. So guess I should be ok.

btw, I do believe IT dept now has means/computing power to dig really deep and fast. This year, I received notice under 143(1) in two weeks of filing. Never had this faster closure in the past.
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Old 18th January 2016, 19:07   #819
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

My returns filed in September are still shown as "under process". One of my colleague filed much earlier than me, and he gets the same status as well.
So, looks like something is wrong. We both have only our company as common link. Nothing else is similar.
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Old 18th January 2016, 19:43   #820
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@S_U_N; I filed five returns in all, my son (ITR4 with statutory audit), mine, my daughter-in-law, my wife (zero tax, with capital gains - 54EC), and my HUF (zero tax, with refund). The first four have been processed, while the HUF is still pending. I may add that except for my son, Audit, digital signature, etc., the other four were filed together.
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Old 19th January 2016, 07:56   #821
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

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btw, I do believe IT dept now has means/computing power to dig really deep and fast.
Oh yes no doubt about that. As someone who manages a mid-size BI team I do interview a lot of specialists who have worked on the IT department project, and the impression I get is that it is a sophisticated setup with a lot of smart people working there. What I meant is that they don't have (no BI team would) the wherewithal to investigate a single transaction taken out of the millions with little or no contextual analysis.

If you routinely make large-ticket purchases and file returns with annual income < some threshold, then they'll investigate. Not just because you bought a 10L+ car.
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Old 19th January 2016, 11:37   #822
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

This year, I have taken advantage of the senior-citizen exemption from paying advance tax.

I'm still confused as to when I have to pay the amount (all at once) for the whole year: is it end of March?
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Old 19th January 2016, 12:23   #823
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

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This year, I have taken advantage of the senior-citizen exemption from paying advance tax.

I'm still confused as to when I have to pay the amount (all at once) for the whole year: is it end of March?

As you rightly mentioned, there is no requirement of paying advance tax for senior citizens (age - 60 years or above). In that case, the whole amount of tax for a financial year can be remitted before filing of return as self-assessment tax without any interest. Note that, the return of income is to be filed before the due date otherwise there would be interest applicable for delayed filing of return.

Also, do note that exemption of non-payment of advance tax is applicable only if you do not have any income from business or profession. In other words, if you have any income from business or profession, this exemption would not apply and advance tax is payable.
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Old 20th January 2016, 00:41   #824
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Also, do note that exemption of non-payment of advance tax is applicable only if you do not have any income from business or profession. ... ... ...
None at all. I am very much retired
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Old 19th February 2016, 11:06   #825
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

Had a question on Interest Exemption for a second property. I am aware that unlike the first (or self occupied) property, where the loss on house property claim is restricted to 2L, in the case of a 2nd let out property (or deemed let out), there is no cap on the interest that can be claimed as deduction and the full interest component can be reduced from taxable income.

I have been paying full EMI from ~May 2015. The registration and handover is expected to be done in March 2016. Question is, can I claim deduction for all the interest that I have paid in 2015-16 or whether I need to do some prorating and can claim on a component for the period after hand over (In this case then it will be just for the month of March).

I have asked in a few places and have not got a clear answer. Some folks say irrespective of the date of possession, as long as it is in the current financial year, all interest can be claimed, some folks say otherwise.

Also, what is the definition of possession as per IT Department. is it the registration of the property?

Thanks in advance.
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