During FY2018-19, I redeemed equity-oriented mutual funds. The long-term capital gain from this transfer is zero. Further, I have income from pension and bank interest. Which ITR form should I file for AY 2019-20?

Venkoba Rao More

As per the forms notified by the income-tax authorities for FY 2018-19, Form ITR-2 is to be used by an individual or a Hindu Undivided Family (HUF) who is not eligible to use ITR-1 (Sahaj) and who does not have any income under Profits or Gains of Business or Profession. One of the exclusions for use of form ITR-1 (Sahaj) is in case of an individual having income from capital gains. Since you have reportable income under the head capital gains from transfer of equity- oriented mutual funds (in addition to pension and bank interest incomes), you shall be required to use ITR-2.

I am a retired bank officer and my income is pension and deposit interest. I regularly submit I-T returns. Last year, I joined a firm on contract basis and has been getting professional fees (194 J), on monthly basis. The firm is deducting tax at the rate of 10 per cent. I have a home loan, and claim deduction for loan interest as well as principal repayment. My net income after the eligible deductions is below ₹10 lakh. Will you please advise me as to which form I should use to file I-T returns (as I am getting professional fees) and whether I can file it online. Please also advise the eligible deductions from the professional fees, while calculating tax, if any, and whether I have to submit any proof for the deductions.

Nandakumar

I presume that since you have retired as a bank officer, you are carrying on the profession of accountancy as per the provisions of Section 44AA of the Income Tax Act. Further, I presume that you are a resident in India as per provisions of Section 6 of the Act. Accordingly, since your total gross proceeds from the profession do not exceed ₹50 lakh for FY2018-19, you are eligible to be covered under the provisions of Section 44ADA of the Act for computing Profits and Gains of Business on a presumptive basis.

In case of presumptive basis of taxation, 50 per cent of the total gross receipts or any higher amount can be considered taxable income. Since a flat deduction of up to 50 per cent is provided under Section 44ADA, the same accounts for the eligible deduction/ exemptions against such professional income, and no additional deduction for expenses is allowed. In case you estimate that the amount taxable should be less that 50 per cent of the total gross receipts, you may claim the same and tax your professional incomes on net basis (ie, after claiming of business expenses against the gross receipts). For claiming the same, you shall be required to maintain specified books of accounts and other documents as per provisions of Section 44AA of the Act, and also get the accounts audited as per provisions of Section 44AB of the Act.

As per the forms notified by the income-tax authorities for FY 2018-19, Form ITR-4 is to be used by tax payers who have opted for presumptive income scheme under the provisions of Section 44ADA of the Act. The form can be filed online by logging into the Income Tax Department’s official website .

I am a senior citizen, and have to file ITR-3 as I have pension, capital gains, mutual funds distribution commission and FD interest income. When I file the return, the system is not picking up the eligible amount of ₹50,000 towards exemption from bank fixed deposit interest. Kindly advise where to enter the ₹50,000 80TTB amount in ITR-3?

T Balanarayana

Please note that it is important that the taxpayer fills ‘Part A - General’ of the ITR form — which asks for personal information of the individual — correctly. Rest of the utility will function based on the information provided in ‘Part A – General’. For example, the field for deduction under Section 80TTB of the I-T Act will get enabled only for senior citizens (ie, resident individual of the age of 60 years or more during FY2018-19) based on the date of birth and residential status mentioned in ‘Part A – General’.

Further, for the purpose of claiming the deduction under section 80TTB of the I-T Act, one has to go to ‘Schedule VI-A’ of the ITR form and provide the details of the interest earned. The system will automatically pick up the eligible deduction.

I sold my 10- year-old car. Will this amount be taxed? If so, how to calculate gain? If exempt from tax, where to show this amount in the ITR return?

Randhir Kumar

As per the provisions of Section 2(14) of the I-T Act, ‘Capital Asset’ does not include personal effects, ie, movable property held for personal use by the assesse. Accordingly, any sale /transfer of such asset is not liable to capital gains tax. As the car held by you qualifies as a personal effect, sale of the same is not taxable.

The writer is a practising chartered accountant. Send your queries to taxtalk@thehindu.co.in

Related Topics
comment COMMENT NOW