Personal Finance

Your Taxes

Sudhakar Sethuraman | Updated on September 08, 2019 Published on September 08, 2019

My married daughter is a housewife. She has only interest income of about ₹1 lakh annually, much below the (tax) exemption limit. But three years ago, TDS was deducted from her interest income due to non-submission of Form 15G. Therefore, to claim a refund, she filed returns and also got the refund. Thereafter, she continues to file returns with nil tax. Can she discontinue filing returns? Is it compulsory to continue once the returns are filed once? What will be the repercussions if no returns are filed henceforth?

Jayant Gajendragadkar

Until tax year 2018-19, every individual was required to file income tax returns if his/ her total income exceeded the basic exemption limit (₹2.5 lakh for resident individuals not being senior citizens). Further, an individual who is a resident and ordinarily resident of India (ROR), holding an asset (including any financial interest in any entity) outside India or is a signing authority outside India or beneficiary of any asset (including any financial interest in any entity) outside India is required to file the ITR.

However, with effect from tax year 2019-2020 an individual will also be required to file tax returns if any of the following conditions are satisfied:

1. Incurred electricity charges of more than ₹ 1lakh, or

2. Incurred expenditure of more than ₹2 lakh for travel to any foreign country, or

3. Deposited more than ₹1 crore in one or more current accounts during the year.

In your case, though your daughter has been filing returns earlier, if none of the above conditions are satisfied, filing of ITR is not mandatory from tax year 2019-2020 onwards.

There should not be any repercussions under the Income Tax Act if she discontinues filing her tax returns, provided she does not fulfil any of the conditions mandated for tax returns filing.

As per Section 70(3) of the I-T Act, I have adjusted my long-term loss in equity with long-term gains on the sale of a residential plot held for more than five years. After adjusting, still a sustainable amount is left for taxation purpose. Please advise if I can invest the balance sustainable amount in NHAI bonds to avoid payment of tax on the sale of the residential plot.

Lalit Kumar

Deduction under Section 54EC of the I-T Act can be claimed against long-term capital gains arising on sale of a residential plot upon investment in specified bonds (including National Highway Authority of India (NHAI) or Rural Electrification Corporation bonds) of up to ₹50 lakh. Such investment should be made within six months from the date of transfer of such capital asset.

Based on the above, you can claim deduction under Section 54EC if you invest in such bonds within six months from the date of transfer of the residential plot.

The writer is Partner, Deloitte India. Send your queries to [email protected]

Published on September 08, 2019
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