[Bhargav7]

Originally Posted by hellmet

Now, am I required to invest the entire sale amount of 1Cr or just the capital gains amount of 80L, thus freeing up the 20L for other purposes?

If the property you have sold is a residential house, you need to invest only 80L (Section 54).

However, if the property sold is not a residential house, you need to invest 1Cr (Section 54F).

[hellmet]

I have another question w.r.t CII and when it is effective. Apologies for flooding this thread.

In this image:


.. the CII for FY 2020-2021 is 301. Does that mean that if I sell the house today, I can apply '301' as CII? In other words, is that rate effective from April 1st 2020, and a new rate may be announced shortly for 1st April 2021 (FY2021-2022) onwards?

I ask because of a confusing ET article that the '301' rate is effective from 1st Apr 2021, and couldn't find any information to refute or confirm it elsewhere.

According to the finance ministry notification, CII for FY 2020-21 shall come into force with effect from 1st day of April, 2021 and shall accordingly apply to the assessment year 2021-22 i.e FY2020-21 and subsequent years.

Thank you!

[binand]

Originally Posted by hellmet

I ask because of a confusing ET article that the '301' rate is effective from 1st Apr 2021, and couldn't find any information to refute or confirm it elsewhere.

Is it confusing? It clearly says "shall accordingly apply to the assessment year 2021-22 i.e FY2020-21 and subsequent years". Your income assessed during an assessment year pertains to the previous year. So if it applies to AY 2021-22, then what it means is that it applies to the income you earned in the previous year, which is FY 2020-21.

So if the capital gains occurred in 2020-21, 301 is the CII to use.

[Bhargav7]

Originally Posted by hellmet

.. the CII for FY 2020-2021 is 301. Does that mean that if I sell the house today, I can apply '301' as CII? In other words, is that rate effective from April 1st 2020, and a new rate may be announced shortly for 1st April 2021 (FY2021-2022) onwards?

This understanding is correct.

Essentially, the assessment year starting 1st April 2021 means Financial year April 2020 - March 2021. So the article you mentioned is also correct, though a bit confusing for non-tax folks.

[hellmet]

Originally Posted by binand

Is it confusing? It clearly says "shall accordingly apply to the assessment year 2021-22 i.e FY2020-21 and subsequent years". Your income assessed during an assessment year pertains to the previous year. So if it applies to AY 2021-22, then what it means is that it applies to the income you earned in the previous year, which is FY 2020-21.

So if the capital gains occurred in 2020-21, 301 is the CII to use.

It is, because the ET article mentions FY2020-2021 (not AY) and at the same time says the rate is effective April 2021

I do understand the differences between AY and FY.

I'm going to blame the article author and move on.

Originally Posted by Bhargav7

This understanding is correct.

Essentially, the assessment year starting 1st April 2021 means Financial year April 2020 - March 2021. So the article you mentioned is also correct, though a bit confusing for non-tax folks.

Thank you for your patient explanation.

[whitewing]

A question on the tax on dividends:
How are you tracking the dividend income, since we need to declare this as taxable income?
I thought this would come automatically in the form 2AS, since all my holdings are in demat. Unfortunately, I see only a very few of the dividend payouts being listed (and none of the payouts <5k are listed).

[binand]

Originally Posted by hellmet

I do understand the differences between AY and FY.

You assess your income in a certain (financial) year AFTER that financial year is over (because while the financial year is in progress you can't accurately assess your income). So assessment year leads the financial year by one.

In India financial years run from April 1 of a year to March 31 of the subsequent year. You assess your income in such a financial year on on after April 1 of the subsequent year (but before the deadline imposed by government; for us individuals it is 31 July).

[vsrivatsa]

Originally Posted by Bhargav7

However, if the property sold is not a residential house, you need to invest 1Cr (Section 54F).

What about vacant plot? Would it get the same treatment as a residential house?

Originally Posted by binand

So if the capital gains occurred in 2020-21, 301 is the CII to use.

A more wider question on the same topic - is there any limit to the number of times an Individual can avail the Section 54F or Is it OK for an Individual to keep buying/selling/re-investing as per the rules of holding period and reinvestment and avoid tax?

[Bhargav7]

Originally Posted by vsrivatsa

What about vacant plot? Would it get the same treatment as a residential house?

If you sell a vacant plot, Section 54F applies. You need to buy a new residential house with Net consideration received (Not just the capital gains).

If you own more than one residential house, you will not be eligible for exemption under section 54F.

Originally Posted by vsrivatsa

A more wider question on the same topic - is there any limit to the number of times an Individual can avail the Section 54F or Is it OK for an Individual to keep buying/selling/re-investing as per the rules of holding period and reinvestment and avoid tax?

There is no such limit as long as the other conditions are satisfied.

[vsrivatsa]

Originally Posted by Bhargav7

If you sell a vacant plot, Section 54F applies. You need to buy a new residential house with Net consideration received (Not just the capital gains).

Thanks - that means in case of Plot Sale it is not the differential amount but the entire amount needs to be re-invested. So there is no indexation etc. at all to be considered - the entire amount has to be re-invested.

[hellmet]

A subsequent query w.r.t Section54F, according to which I must purchase a residential property either 1 year before or 3 years after the sale of my current property.

Let's say I sell my current property today, do I need to ensure that the new property needs to be "registered" in my name 3 years from today? Or is it sufficient if I show proof that I invested the capital gains in the new property?

I ask because most apartments I want to purchase today have a delivery date of 2-4 years from now, and registration is only possible at that point.

Thank you!

[hserus]

Originally Posted by hellmet

Let's say I sell my current property today, do I need to ensure that the new property needs to be "registered" in my name 3 years from today? Or is it sufficient if I show proof that I invested the capital gains in the new property?

You have paid via bank transfers to a builder and paid TDS deducted to the government for some property right? That is sufficient.

Note - If you sell the property in black and hand the black cash to the builder this won't work the same way

[rajesh1868]

Originally Posted by rajesh1868

I had filed my returns on 8th of December and also did e verification on the same day. The returns status is still 'Successfully e verified'.
Is it normal for it to be in this state for this long? Asking since I also filed my mothers returns a week late and the status is ITR processed

It is same status for me. Do I need to check anything?

Originally Posted by saket77

I filed in June and I am still waiting for it to get processed.

Originally Posted by ksrchowdary

I had filed my returns on 05-Aug and verified on same day. Till last week my status is 'Successfully e verified'. This week the status changed to "Return processing is in progress" and even now it is in this status.

As previously pointed out, no or smaller refund amounts are being processed quickly, where as 5 digit and larger refunds are taking longer time.

saket77, ksrchowdary Did yours get updated?

[saket77]

Originally Posted by rajesh1868

It is same status for me. Do I need to check anything?

saket77, ksrchowdary Did yours get updated?

Yes, mine was processed around mid of January ‘21.

Regards.

[rohan_iitr]

Need some help regarding Income Tax return filed for FY 2019-20.

Last night, I received the following SMS -
The Income Tax Department has identified high value information which does not appear to be in line with the Income Tax Return filed for Assessment Year 2020-21 (relating to FY 2019-20). Please revise ITR / submit online response under e-Campaign tab on Compliance Portal (CP). Access CP by logging into e-filing portal and clicking on 'Compliance Portal' link under 'My Account' or 'Compliance' tab - ITD

So, I logged in to the income tax e filing portal and downloaded the list of high value transactions from the Income Tax Compliance Portal.

In this list, other than the SB interest and FB interest, there were 2 high value entries for - Interest other than “Interest on Securities” received (TDS Form 26Q, Section 194A)

I am not able to make out what these entries are. Please help.

Also, the SB interest mentioned for my salary account is way higher than what I can see in the account statement.

(I don't have any other sources of income, other than salary, SB interest and FD interest)

Rohan