[mtripathi13]

Originally Posted by mtripathi13

Dear Mustang_Boss


Generally, the IT department issues an annual circular/instruction for tds on deduction on salary. However, the problem is that this instruction comes after quite a delay. For example, for F.Y.22-23, the instruction came on 07/12/2022, nearly eight months after the start of the year.

Quoting my own post for an update.

Even though detailed instructions have not yet been issued by the department, it has issued a circular being circular 04 of 2023 dated 5th April,2023 clarifying that to remove hardship to employees, the employers shall seek information from each employee for his/her intended tax regime and deduct tds accordingly. So if you please exercise your option if any communication is received by you. If no communication is received do refer this circular and request them to act on it.

Regards
Manish

[Mustang_Boss]

Originally Posted by mtripathi13

Dear whitewing

Dear Mustang_Boss

The new regime is default for income earned in F.Y.2023-24. So even you wish to avail the old regime, the employer may not be agreeable to deduction of tax on old rates. They may proceed to deduct the tax only on new rates. However, this is my surmise only. You may contact the HR with a request and take it forward from there.

Thanks for your response sir.

I have heard FM statement on the new regime being default, but never understood what it means to us.

If it is default, which means, we have the option to change it to the old regime. No? Am i missing anything? If it is the only option, then the Finance minister would have said, its the only option for filing... something like this.

Please comment, so i could pitch in and explain the situation to the finance guy and get this corrected.

[mtripathi13]

Originally Posted by Mustang_Boss

Thanks for your response sir.

I have heard FM statement on the new regime being default, but never understood what it means to us.

If it is default, which means, we have the option to change it to the old regime. No? Am i missing anything? If it is the only option, then the Finance minister would have said, its the only option for filing... something like this.

Please comment, so i could pitch in and explain the situation to the finance guy and get this corrected.

Yes, you have the option to choose the old regime. In case of persons like you who do not have business income the option can be changed for each and every year. I have also pointed out about circular 4 of 2023 which shall solve your tds problem too. Do check my previous reply too.

[thanixravindran]

Originally Posted by Mustang_Boss

Thanks for your response sir.

I have heard FM statement on the new regime being default, but never understood what it means to us.

If it is default, which means, we have the option to change it to the old regime. No? Am i missing anything? If it is the only option, then the Finance minister would have said, its the only option for filing... something like this.

Please comment, so i could pitch in and explain the situation to the finance guy and get this corrected.

Most companies are providing the option to decide on the tax return regime. Till last year old regime was default and this year new regime is default. That is the only difference.

You can opt only once with employer and cannot change during the FY. Employer will calculate your tax accordingly and deposit the TDS. However, you can change between old and new tax regime during ITR filing. This is for salaried and the same as last FY

I think only for business or professional income, one cannot change between old and new tax regime. I am not CA but this is my understanding and hope Manish Tripathi will be able to clearly answer.

[thanixravindran]

Originally Posted by Bhokal

I currently own 2 flats for which I am paying home loan (HL) EMIs.

Flat 1 - self occupied
Flat 2 - construction complete, builder offering possession but not taken because of lack of OC (occupancy certificate) and CC (completion certificate).

As per the tax benefit rules, I can claim deductions for 2 home loans. But last year, I received a demand noticed for additional tax in which they disallowed only interest component (but did not touch principal component) for HL2. This caused an additional tax liability as my 80c deduction fell quite below 2 lakh limit.

I did not contest the noticed and paid the amount. Any reason why it was disallowed (or maybe I should have contested it)?

If I remember correctly, under construction property cannot be claimed for interest deduction in the same financial year without occupation/completion. It is called as pre construction interest. I think you need to carry forward the loss for next five years and claim 20% each assessment year from the year occupancy or completion certificate is received.

https://cleartax.in/s/case-study-ded...ction-interest

[mtripathi13]

Originally Posted by Mustang_Boss

Thanks for your response sir.

I have heard FM statement on the new regime being default, but never understood what it means to us.

If it is default, which means, we have the option to change it to the old regime. No? Am i missing anything? If it is the only option, then the Finance minister would have said, its the only option for filing... something like this.

Please comment, so i could pitch in and explain the situation to the finance guy and get this corrected.

Yes you can choose the regime. Only for business/profession income there are certain restrictions. For non-business income the option can be exercised for each year.

[whitewing]

Cross posting this query from carboy in the debt fund thread, could the experts here clarify? I've had the same doubt as well.
https://www.team-bhp.com/forum/shift...ml#post5532458 (Investing in debt funds)

How exactly is 3 years for debt funds calculated? It is like 365 x 3 days? Or is it date based? Or something else? I purchased a debt fund on 16th Apr 2020. If I sell it today, will be taxed as Long Term Capital Gains or is it best to wait for a few days to make sure?

[mtripathi13]

Originally Posted by whitewing

Cross posting this query from carboy in the debt fund thread, could the experts here clarify? I've had the same doubt as well.
https://www.team-bhp.com/forum/shift...ml#post5532458 (Investing in debt funds)

Dear whitewing

Very interesting question indeed. This is seemingly such an innocuous question, but you will be surprised if I delve further in this matter.

Section 2(29A) and Section 2(42A) of the Income tax Act, 1961 define the term long-term capital asset and short-term capital asset respectively. Section 2(29A) is simple definition and provides “long-term capital asset” means a capital asset which is not a short-term capital asset. Therefore, any capital asset which is not short-term capital asset is long term capital asset.

However, Section 2(42A) is detailed provision which define the short-term capital asset. The main provision provides as under (42A) “short-term capital asset” means a capital asset held by an assessee for not more than thirty-six months immediately preceding the date of its transfer.The special cases are being ignored here for sake of simplicity.

Now, the catch is, ‘month’ is nowhere defined in the Income Tax Act,1961. Go, figure that out. So, we will have to depend on definition under General Clauses Act, which says it means a calendar month. However, some judicial judgements have overruled the same and held that month means a lunar month of 30 days. Such interpretation has been done in respect of some other section, but it should hold for other purposes too.

Accordingly, my advice will be to calculate 36 lunar months from the date of acquistion and then keep buffer of 15 days (5 each for each of the years) and then liquidate the investment. This will be the safest bet.

Regards
Manish

[whitewing]

Originally Posted by mtripathi13

...
Accordingly, my advice will be to calculate 36 lunar months from the date of acquistion and then keep buffer of 15 days (5 each for each of the years) and then liquidate the investment. This will be the safest bet.

Thank you for the detailed clarification! Will take note to buffer in time spans to avoid scope for disputes.

Till I read your response, I never did doubt that for Govt parlance, a "month" was any month per the gregorian calendar :-), although I think the official calendar is the shaka one.

[kushagra452]

Advance tax is due on 15 June. As per the govt laws, 15% of the total tax due in FY 2024-25 needs to be deposited by June 15, 2023. My query is as follows:

While calculating the advance tax due does one need to take into account the 10% TDS deducted by clients? For example:

- Assuming that the total TDS for the FY deposited by my client is Rs.10.

- If the total tax liability for the full financial year comes to Rs.40.

Do I need to deposit 15% of Rs.40 i.e Rs.6 or 15% of Rs.30 (Rs.40-Rs10) i.e. Rs. 4.50

Thanks.

[montsa007]

Originally Posted by kushagra452

Advance tax is due on 15 June. As per the govt laws, 15% of the total tax due in FY 2024-25 needs to be deposited by June 15, 2023. My query is as follows:

While calculating the advance tax due does one need to take into account the 10% TDS deducted by clients? For example:

- Assuming that the total TDS for the FY deposited by my client is Rs.10.

- If the total tax liability for the full financial year comes to Rs.40.

Do I need to deposit 15% of Rs.40 i.e Rs.6 or 15% of Rs.30 (Rs.40-Rs10) i.e. Rs. 4.50

Thanks.

When I used to work in a private firm, we always considered net income for calculating advance tax (i.e. on 30 rupees, since the 10 rupee will be deposited by the client in Govt. account). Also another habit we had was to pay a bit extra over the liability, good to have a refund due at the end if the year instead of amount payable.

Also keep in mind, the advance tax is only calculated for the period upto which you're making payment, not for the entire year (Unless you're 100% certain about the inflow), since you'll be paying another installment of advance tax in September.

[KL01toKA03]

Originally Posted by anandhsub

TDS you have paid is for the builder. He would adjust it vs his own taxes.

Only TCS that is paid on car purchase or foreign transactions can be adjusted vs income tax.

Is there any change in this process? For the latest payment to the builder, I was asked by the builder to pay the tax and provide the signed form 16B. Earlier, I used to pay the tax amount to the builder, and they would pay the taxes.

Does this change offer any benefit to the buyer?

[vinay.sathyan]

Originally Posted by KL01toKA03

Is there any change in this process? For the latest payment to the builder, I was asked by the builder to pay the tax and provide the signed form 16B. Earlier, I used to pay the tax amount to the builder, and they would pay the taxes.

Does this change offer any benefit to the buyer?

Yes this a change in process. The form can no longer be filled by the seller, we need to login to our IT portal and then generate the form.
Lot of youtube videos to help you out.

Don't know of any benefits other than additional work for buyer now. It takes a while to generate the final form 16B.

[xcentrk]

Originally Posted by mtripathi13

Regards
Manish

Hi Manish, Just a quick query from my side. I have been freelancing for a long time and since I used to work before, I will get my Form-16 and 26AS and file accordingly. But quit my full-time job a while ago and started freelancing. Since most of them are cash based or small firms, they don't deduct TDS. Now I got a contract from company from another country. They do have an office in India and they will deduct a 10% TDS.

While filing next year, what option should I choose? ITR-1 or ITR-4? Also, can I use presumptive taxation if I choose ITR-4? Please clarify this.

Thanks in advance and really great to see your help in this thread.

[mtripathi13]

Originally Posted by xcentrk

Hi Manish, Just a quick query from my side. I have been freelancing for a long time and since I used to work before, I will get my Form-16 and 26AS and file accordingly. But quit my full-time job a while ago and started freelancing. Since most of them are cash based or small firms, they don't deduct TDS. Now I got a contract from company from another country. They do have an office in India and they will deduct a 10% TDS.

While filing next year, what option should I choose? ITR-1 or ITR-4? Also, can I use presumptive taxation if I choose ITR-4? Please clarify this.

Thanks in advance and really great to see your help in this thread.

Dear xcentrk,

ITR-1 or SAHAJ is a simplified form and is applicable mainly for salaried taxpayers who may have interest income and one house property. Even among these taxpayers, there are many other conditions that also need fulfillment for their eligibility for filing ITR-1.

You have mentioned that you do freelance work, which falls under business/profession. So, you are not eligible for filing ITR-1.

Accordingly, you need to file ITR-3 or ITR-4 (SUGAM). Kindly note that ITR-4 is not mandatory. It is a simplified form for taxpayers who offer income under presumptive taxation scheme. The presumptive income can also be offered in ITR-3, which is a more detailed form.

I hope I have been able to clarify your doubts.

Regards
Manish