Income Tax Question & Answers

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Income Tax Question Income Tax Question and Answers

Income Tax Question and answers given by Tax Experts. Name & location specific details are removed from the original questions we received to protect the privacy of our customers.

On this page:

  1. Tax has to be paid, but having only partial amount
  2. Long Term Capital Gains on selling a land
  3. Filing of Returns for AY 2009-10
  4. Set off Business Loss
  5. Transportation Allowance
  6. Regarding Tax Filling
  7. Clubbing of Income
  8. Short Term Capital Loss
  9. Capital Gain Tax on Immovable Property
  10. Pan Card for Trust
  11. Income from Sale of Shares
  12. Capital Gain Exempt u/s 10(38)
  13. Donation benefit while calculating TDS
  14. Online Forex Trading
  15. Applicable taxes for Auction business
  16. Deemed Dividend under section 2(22)(e)
  17. Intimation under sec 143(1)
  18. Tax on Short Term Capital Gain


Tax has to be paid, but having only partial amount

I have to pay tax of 40 lakhs, but now I have only 20 lakhs.

Remaining amount I lost in share market. I came to know that I have to file the returns by 30'th Sep.

What will happen if I pay only part amount at the time of returns?

In case you are required to be audited under the Income-tax Act, you need to file the return before 30 September.

In case you do not have money due to loss in subsequent year, there is no concession for you in this regard, as you were expected to pay the tax in advance within 31st March.

However, you can file the return paying the amount available with you and showing the balance as payable to the Department, for which the Department would issue notice of demand.

You can request the IT Department to give you chance of paying it in installments, showing your loss as hardship, which the AO may accept.


Income Tax Question - Long Term Capital Gains on selling a land

My father is having a land in his name registered for Rs.30,000 (thirty thousand) got from his father by gift settlement.

Now the market value of the land will be around Rs.30,00,000 (thirty lacs) and the govt. guideline value is also Rs.30 lacs.

He wants to give that to me as gift settlement. I am also planning to buy a flat for Rs.30 lacs.

Here are my queries.

  1. While giving as gift settlement in what value (in Rs) he has to register the land on my name?
  2. Can I sell the land immediately once gift settlement is registered in my name?
  3. Or should I wait for 3 years to get LTCG or I can go immediately to buy a flat?
  4. How can I get rid of the LTCG tax here?

In the case of gift settlement the market value as on the date of settlement is used for registration.

You can very sell it immediately, since in the case of gift the period of holding of the previous owner is also considered as being held by the assessee and hence, you could get benefit of LTCG, by re-investing it in a House.


Income Tax Question - Filing of Returns for the year ending 31.03.2009 (AY 2009-10)

Can I file my return of Income relating to the financial year ending 31.03.2009, i.e., AY 2009-10, now?

Your normal due date is July 31, 2009 or September 30, 2009 depending on whether you are required to get audited or not.

In this case you have missed the due date. In such a case, you can file a 'Belated Return' within 1 year from the end of the relevant assessment year, i.e., upto 31.03.2011.


Set off Business Loss

I have a proprietary firm and file IT Returns as individual. I want to sell my office premises purchased in 2005 to cover my business loss.

Will I be eligible for set off.

Such a sale would result in Capital Gains, which cannot be utilised to set-off brought forward business losses.


Income Tax Question - Transportation Allowance

My question is my salary is Rs.50000 plus Rs.20000.

I am getting Rs.20000 for meeting the Traveling expense from my residential accommodation to office.

Please let me know whether Rs.20000 is also taxable or not.

Whether Rs.20000 is per month or per annum is not available.

Further, whether it is allowance or Perquisite is not available.

For transportation allowance, you are exempt upto Rs.800 per month (if you are blind / ortho handicapped in lower limbs - Rs.1,600 per month).

If it is perquisite in the nature of Bus (common for all employees) - not taxable.

However, if it is perquisite in the nature of Car, it is taxable at a value based on various factual positions.


Regarding Tax Filling

I am holding a Credit card based on the Fixed Deposit for Rs.10000.

I am not having a taxable income and my salary is around 1 Lakh Per annum. Do I need to file a tax return?

No need to file return.


Income Tax Question - Clubbing of Income

My minor child became major 31-06-2011. Please give me the explanation in Income tax act that how the Income should be clubbed.

  1. In the hand of individual for the full year(1-4-2011 to 31-3-2012).
  2. In the hand of minor itself for the full year who become major after 31-6-2011.
  3. Partly in the hand of individual and partly in the hand of minor, i.e., 3 month for Individual and 9 month for minor who become major.

Partly in the hand of Individual and partly in the hand of Minor, i.e., 3 month for individual and 9 month for minor who become major.


Income Tax Question - Short Term Capital Loss

I incurred short term capital Loss in FY 09-10 & FY 10-11 in shares on Cash and F&O.

I didn't file Income tax return. I incurred short term capital Gain now.

Can I file Income tax Return for last three years and set off STCL against STCG of FY 11-2012.

Losses can be carried forward only if the return of income is filed within the due date for filing return of income. Hence, not possible.


Income Tax Question - Capital Gain Tax on Immovable Property

I purchase the house property as per Registration 15/02/2006, and expected possession date 30/04/2006.

I sold the property on 15/03/2009. Please clarify whether it is long / short term gain?

If the registration date is 15/02/2006 and the sale date is 15/03/2009 then it can treated as Long term Capital Gain, even though there is minor delay in taking possession.

However, if there is huge delay in possession, then there is a possibility that the IT Dept would take the possession date as date of acquisition.


Income Tax Question - Pan Card for Trust

We have applied for charitable trust creation on 29th July 2011 with charity Commissioner.

Trust deed is done and notarised. We have yet to get registration. Can we apply for pan card ?

Yes. There is no pre-requisite of registration with Charity Commissioner to apply for PAN


Income from Sale of Shares

I have purchased shares in May, 2010 and got profit of 1000 on it.

Do I have to pay the tax on 1000 recd as profit on sale of shares and what would be the tax rate applicable on it?

It depends on the other income you have. It is a taxable income.


Income Tax Question - Capital Gain Exempt u/s 10(38)

Whether Income exempt on transfer of long term capital asset u/s 10(38) shall be subject to indexation? Or accounting income will be exempt?.

In our opinion, there is no necessity to compute the Capital Gains, since it does not form part of Total Income.

However, it is clarified that what is exempt is the income computed in accordance with the provisions of the Income-tax Act and hence, it is only after indexation.


Income Tax Question - Donation benefit while calculating TDS

I am salaried employee.

I am making Donations which get exemption under 80 G.

My employer does not consider Donation while calculating TDS on my Salary.

Employer argues as per Income tax law he is not bound to consider donation under Sec 80 G while calculating TDS.

Please guide and provide relevant section/notification to discuss with my employer.

Refer Circular No. 1/2010 [F. No. 275/192/2009 IT(B)], dated 11-1-2010 - No deduction for 80G to be allowed by employer.


Income Tax Question - Online Forex Trading

I want to trade in online forex trading through a foreign platform. I want to know is this legal or not and also the income tax details about it.

Dealing in online forex trading could result in either 'Speculation' or 'Non-speculation' depending on whether actual delivery happens.

Check the service provider terms of agreement, which would include the excerpts from these regulations.

If not, ask the service provider about the legal obligations complied by them on your behalf.


Income Tax Question - Applicable taxes for Auction business

I would like to know the kind of applicable taxes for auction business in India. The scenario is given below

  1. If An Auctioneer buys an item at X price and sells it at Y price ( Y is always less than X)

  2. The bidders pay a transaction fee for every bid they place. So there would be multiple bids for an item and each bid brings a certain amount of transaction fee/service fee to the auctioneer.

    Auctioneer make money from these transaction fees while he makes loss from what is mentioned in the earlier step.

In this scenario, the auctioneer is actually making loss by selling the item whereas he is getting income from the service charge.

What is the kind of income tax that this business is subjected to?

My assumption is, since the auctioneer would have bought an item before putting it up on auction, it is a second sale for the item.

Please help me understand this.

It is not necessary that the auctioneer has to necessarily buy the goods.

If he buys the goods and sells them, whereby he incurs loss, then he is eligible for set-off such loss against the service charges.


Income Tax Question - Deemed Dividend under section 2(22)(e)

One of the shareholders having substantial interest with voting rights relinquished his rights in the shares under a family partition/arrangement and received money from the company.

The income tax department wants to treat this receipt of income under section 2(22)(e) of the Income Tax Act 1961? Whether the Stand of the Department will hold good?



Income Tax Question - Intimation under sec 143(1)

I showed a long term capital gain of 7,01,894 (Seven Lakh one thousand eight hundred and ninety four only) while filing the income tax return for AY 2008-2009.

The gains were in respect of selling of my flat.

However, I reinvested the entire amount within one year of the above mentioned transaction into buying another property (in which I'm staying currently). Therefore there should be no capital gains tax applicable.

Unfortunately while filing the next year return, I missed out showing the invested amount in my return for AY 2009-2010.

Recently, I have received a demand letter from IT department u/s 143(1) for AY 2008-2009 asking me to pay the tax on capital gains.

Please let me know how to proceed. I have all the receipts of the new property with me.

Should a copy of the same be sent to the IT department along with the reply? What should be the reply?

You have not mentioned the date of acquisition of new property and the date of filing the IT Return for AY 2008-09. Hence, we have given some broad guidelines below.

If you have purchased the new property before filing your return for Assessment Year 2008-09, then you can reply to the assessing officer stating that you have bought the property within the time specified.

If you have not purchased the new property before furnishing your return, then as per section 54, you have to invest in the Capital Gains Bonds Scheme before the furnishing the return and then withdraw and use it for the purpose of the purchase of property.

Even if the Deposit is made within the due date for filing the return it is OK. You can reply to the Assessing Officer as such.

In other cases, it is not easy for you to substantiate your claim for the relief under section 54.


Income Tax Question - Tax on Short Term Capital Gain

My mother (66+) is a pensioner and her annual pension is about Rs.70,000. If she earns short term capital gain of about Rs.100,000, her total income of Rs.2,30,000 is taxable or not?

In other words, if her total income including short term capital gain is less than the taxable income of Rs.2,50,000, whether she is required to pay tax of 10% on her short term capital gain.

If her total income including short term capital gain is less than the taxable income of Rs.2,50,000, she is not liable to pay tax.


To be conscious that you are ignorant is a great step to knowledge. Benjamin Disraeli



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