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Old 8th October 2016, 15:40   #1051
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Originally Posted by sdp1975 View Post
Yes , my father received a certificate from the IT department by e-mail.

It acknowledged his contribution towards paying taxes and nation building .
I received a Silver Certificate on 25th Sep as certificate of appreciation, but am too scared to open the attachment.
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Old 9th October 2016, 12:05   #1052
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I think they are sending these out to all tax payers. I got one for my d-i-l which was the first return to be fined. I expect three more since assessments under 143(1) have come. They are just their way of sating thank you!
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Old 10th October 2016, 18:11   #1053
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I got a 'Bronze' certificate! Them offering a discount coupon instead for the next FY would be too much to expect I guess
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Old 1st January 2017, 22:19   #1054
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Guys, need some inputs.
I have an apartment for which I have got a prospective buyer. Both of us would like to seal the deal by mid of this month. The entire payment would be white. I would like to know the tax implications with regards to capital gains.
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Old 1st January 2017, 22:48   #1055
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I have an apartment for which I have got a prospective buyer. Both of us would like to seal the deal by mid of this month. The entire payment would be white. I would like to know the tax implications with regards to capital gains.
Here is how it works.

We will assume you have held the apartment for a sufficiently long period (3 years, I think) that only long-term capital gains are applicable.

You have a cost of acquisition of the apartment. That price you have to adjust for inflation for the current year. For this, you need to refer to the indexation chart. A quick Google search throws up this version:

http://wealth18.com/cost-inflation-i...-gain-purpose/

Suppose you acquired the flat in FY 2006-07 for Rs. 25L. Then the inflation-adjusted cost is 25L x 1125/519 = 54L in FY 2016-17.

Now further suppose you are selling it for 90L. Then your capital gains is 90 - 54 = 36L. You need to pay capital gains tax on this amount.

Your buyer needs to deduct 1% TDS on the sale price of 90L and pay it to the government (so you will get only 81L). You have to demand the form 26QB from the buyer - register the sale only after you get and authenticate this form.

As an aside: You can add indexed cost of improvements (interior works etc.) to the cost, bringing down your taxable gains even further.

Now, long-term capital gains tax rate in India is 20% - so you need to pay the government 20% x 36L = 7.2L (since you have already paid 9L, you are in for a refund of 1.8L).

Additional considerations:

* You might have paid for the apartment in installments that span several financial years. I don't know how to apply the indexation then. :-)

* If you reinvest the sale proceedings in real estate, you don't have to pay any tax at all I believe.

* At this point, you need to involve a good tax consultant. This place is fine for a theoretical discussion but for practical advice nothing can beat a CA with many years of experience.
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Old 2nd January 2017, 11:46   #1056
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Your buyer needs to deduct 1% TDS on the sale price of 90L and pay it to the government (so you will get only 81L).

Now, long-term capital gains tax rate in India is 20% - so you need to pay the government 20% x 36L = 7.2L (since you have already paid 9L, you are in for a refund of 1.8L).
Though TDS rate has been correctly quoted at 1%, the TDS amount has been quoted at 10%!

Section 194IA which deals with sale of property by Residents requires the buyer of the property worth more than Rs.50 lakhs to deduct tax at 1% of the sale consideration amount.

However, where the seller is a Non-resident, section 195 is applicable and it is bit more complicated in terms of calculations, etc.

Last edited by Gokrish : 2nd January 2017 at 11:53. Reason: punctuation
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Old 2nd January 2017, 11:53   #1057
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Though TDS rate has been correctly quoted at 1%, the TDS amount has been quoted at 10%!

Section 194IA which deals with sale of property by Residents requires the buyer of the property worth more than Rs.50 lakhs to deduct tax at 1% of the sale consideration amount.

However, where the seller is a Non-resident section 195 is applicable and it is bit more complicated in terms of calculations, etc.
Pay a CA to handle the paperwork, saves you a lot of trouble later.
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Old 2nd January 2017, 11:53   #1058
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Though TDS rate has been correctly quoted at 1%, the TDS amount has been quoted at 10%!
Mental arithmetic goof up. Thanks for pointing that out. I'm embarrassed.
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Old 2nd January 2017, 13:18   #1059
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Quote:
Originally Posted by binand View Post

Here is how it works.

We will assume you have held the apartment for a sufficiently long period (3 years, I think) that only long-term capital gains are applicable.

You have a cost of acquisition of the apartment. That price you have to adjust for inflation for the current year. For this, you need to refer to the indexation chart. A quick Google search throws up this version:

http://wealth18.com/cost-inflation-i...-gain-purpose/

Suppose you acquired the flat in FY 2006-07 for Rs. 25L. Then the inflation-adjusted cost is 25L x 1125/519 = 54L in FY 2016-17.

Now further suppose you are selling it for 90L. Then your capital gains is 90 - 54 = 36L. You need to pay capital gains tax on this amount.

Your buyer needs to deduct 1% TDS on the sale price of 90L and pay it to the government (so you will get only 81L). You have to demand the form 26QB from the buyer - register the sale only after you get and authenticate this form.

As an aside: You can add indexed cost of improvements (interior works etc.) to the cost, bringing down your taxable gains even further.

Now, long-term capital gains tax rate in India is 20% - so you need to pay the government 20% x 36L = 7.2L (since you have already paid 9L, you are in for a refund of 1.8L).
Thanks for the detailed explanation. After going through the website that you suggested, I understand that there is an option to open a Capital Gains Account into which the entire amount can be deposited and later utilized for buy property. in this case tax is also avoided.
now I am checking if ICICI Bank offers this facility.
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Old 3rd January 2017, 07:32   #1060
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Originally Posted by rajivr1612 View Post
Thanks for the detailed explanation. After going through the website that you suggested, I understand that there is an option to open a Capital Gains Account into which the entire amount can be deposited and later utilized for buy property. in this case tax is also avoided.
now I am checking if ICICI Bank offers this facility.
There are specific capital gains bonds (eg REC / NHAI) which can be purchased.

Not a very good rate of return but well - you may find it cheaper than paying tax on the whole amount if you're willing to lock in your funds for 3 years. Then pay tax on the interest gained.

As you said ICICI http://content.icicidirect.com/maili...ain-bonds.html
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Old 5th January 2017, 08:58   #1061
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Anyone working as an independent consultant here? Had some queries.

1. Does one need a service tax registration? I have heard that the regular PAN + 001 can be used.

2. If one is working out of one's own home, what all are deductibles? I know that computer, A/c etc. are, but how is it calculated - depreciation as deductible?

3. Does one need a separate bank account or the regular savings account will do?

4. I understand one needs to get a CA to audit the IT return. Any online service or does one need to hunt for one the old-fashioned way?

Suppose one bills 10 hours at Rs. 1000 per hour and incurs Rs. 3000 as billable expenses (travel) and Rs. 2000 as non-billable expenses (internet).

5. Does the client pays 10 x 1000 + 3000 less 10% TDS = Rs. 11700?

6. How does the consultant's return look like? Income 13000, deductibles 5000, tax @30% = 2400, TDS = 1300, balance tax payable Rs. 1100? So the effective rate of tax is (1300 + 1100)/13000 = 18.5%?

7. Any references (online/book etc.) that you can recommend?
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Old 5th January 2017, 16:41   #1062
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[quote=binand;4121792]Anyone working as an independent consultant here? Had some queries.

1. If your billing in 1 financial year is likely to exceed Rs. 10 lacs you require a service tax registration no.

2. you can claim depreciation on all home assets which are used for the service. But the amount will not be significant.

3. Your personal savings a/c will do. But recommend a separate bank a/c if you are going to do this continuously.

4. The IT Act mentions what professions require compulsory audit of books of accounts (not tax return)


5. Yes. Hence you will have to pay advance tax every quartrer

6. You will have to maintain books of accounts and prepare a P&L. The income will be charged under the head Profits & Gains of business. The return of income is very elaborate.

7. Nope. But do look up the return of income format which will give you an idea of the level of details required
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Old 5th January 2017, 17:13   #1063
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if only I had known such a thread existed!
I use a CA to take care of my tax filing. For my 2012 returns, the IT dept raised a demand, and my CA tells me that apparently in the IT dept database, one of the TDS payments by my employer is not reflecting. he has filed revised returns every time i ask him if there is an update, he files a revised return and says is waiting for an update

in the meantime he says someone seems to have paid some advance tax for the 2012 year into my account, and it has become complicated.

I still havent gotten any income tax returns for the past 4 years. My CA says we have to wait for the IT dept to wait for them to come back on the latest set of revised returns he filed a few months back - and this according to him will take few more months.


Is this expected? for 2014 i have a significant amount of tax returns pending due to me being abroad most of the FY, and I have not seen any of it.

Last edited by greenhorn : 5th January 2017 at 17:14.
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Old 6th January 2017, 16:22   #1064
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Change your Chartered Accountant
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Old 6th January 2017, 16:24   #1065
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Change your Chartered Accountant
^^ Best possible advice. He seems to have messed something up badly.

Find a good one, have him untangle the logjam somehow. Get copies of all returns that he allegedly filed.
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