Tax query: Should I submit Form 15H every time dividend is declared?

I have submitted Form 15H to a company for the final dividend of the financial year 2021-22 , on July 2, 2022, which has validity up to March 2023. When the company declared interim dividend for the financial year 2022-23, they deducted TDS from my dividend income, saying the submitted Form H had no validity. Do I need to submit Form 15H each and every time dividend is declared?

C.P.Murugesan 

Form 15H is required to be submitted by individuals who are of the age of 60 years or more claiming incomes without deduction of tax at source. Further, this has to be done for every payment.

If there are multiple dividend payments during a financial year and if your total income is less than the threshold for tax trigger, you would be required to furnish Form 15H for each payment.  It is important to note that subsequent Form 15H would need to include the details of Form 15H furnished previously for the same financial year.

I have a few queries with respect to taxation of Joint Development Agreements (JDA).

1. I own a residential flat. If I enter into a JDA for that property, it will be treated as transfer and taxable as capital gains in the year of Completion certificate (CC). Considering that I am not selling the old or new property and the gain (if any) is unrealised, how can I meet the tax liability without any cash flow?

2. Is any payment received from the builder in lieu of rent also taxable only in the year of issue of CC?

3. Are any exemptions available under 54 or 54EC?

Vaidyanathan A P

As per Section 45(5A) of the Income Tax Act, 1961, in case of joint development agreements, capital gains arise in the year in which certificate of completion is obtained. Further, in the case of joint development agreement, capital gains arise when the property is sold.

In respect of payment in lieu of rent, one has to look into the terms of the joint development agreement to determine the nature of the payment and depending on the same, its taxability needs to be determined. There are conflicting judgements on whether this payment could be treated as income or not.

Since your property is a residential flat, you would be eligible for exemption under Section 54 and 54EC if the other conditions are satisfied. Section 54:

·        Long-term asset residential house property is sold – we assume that your residential flat has been owned by you for more than 3 years prior to the date of sale

·        Sale proceeds need to be invested in another house property

·        Time limit: within 1 year before date of sale or 2 years from the date of sale or completed construction within 3 years from the date of sale.

Conditions for Section 54EC:

·        Long-term asset (land/building/both) is sold – we assume that your residential flat has been owned by you for more than 3 years prior to the date of sale

·        Specified bonds to be purchased within 6 months from date of sale.

·        Maximum limit of ₹50 lakh

·        Investment or capital gains, whichever is lower, is exempt from tax

·        If the bonds are redeemed within 5 years from the date of investment, exemption provided would be revoked and the amount is taxable as long term capital gains in the year in which the bonds were redeemed.

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