Personal Finance

Your taxes

Sudhakar Sethuraman | Updated on November 30, 2020 Published on November 30, 2020

The scrip-wise details are not required in the Income Tax return forms for AY2020-21 for computation of capital gains/business income from shares/units which are not eligible for grandfathering   -  Getty Images/iStockphoto

I bought Nippon India Tax Saver Fund (ELSS)- dividend payout-- on January 13, 2015 at the NAV of ₹24.0624 and redeemed on October 10, 2020 at the NAV of ₹15.3412. The NAV of the scheme on January 31, 2018 was ₹24.9089. How to calculate LTCG/LTCL in this case.

- C.Visalakshi

As per Section 112A of the Income Tax Act,1961 (the Act), long-term capital gain (LTCG) in excess of ₹1,00,000 earned from sale of listed equity shares/equity-oriented fund /unit of business trust (qualifying assets) on which securities transaction tax has been paid shall be subject to income tax at the rate of 10 per cent. Surcharge (if any) and health and education cesses at 4 per cent shall apply additionally.

Where the qualifying assets are purchased before January 31, 2018, the cost of acquisition shall be the higher of the following:

· actual cost of acquisition; or

· lower of (i) fair market value (FMV) of such share on 31 January 2018 (highest quoted price) or (ii) full value of consideration as a result of transfer.

Based on the above as actual cost of acquisition is higher, cost of acquisition for the purpose of computing LTCG shall be ₹ 24.0624. Accordingly, there shall be Long term capital loss (LTCL) of ₹ 8.7212 per unit.

I am an employee of a State government PSU and am retiring in seven months. My employer is deducting TDS on terminal earned leave surrender (ELS). It is understood that Central government PSU employees have complete exemption on terminal ELS. Can I claim refund of this TDS?

-Anil Thekkutt

As per section 17(1) of Income-Tax Act,1961 (the Act), salary includes any payment received by an employee in respect of any period of leave not availed of by him. Further, as per Section 10(10AA)(i) of the Act, any payment received by a Central Government or State Government employee as the cash equivalent of the leave salary in respect of the earned leave at the time of his retirement or separation (whether on superannuation or otherwise) shall be exempt from income tax.

In view of the above provision, as the terminal earned leave is surrendered during your service period, i.e., before retirement, the same shall be taxed under the head ‘Salaries’ under the Act and TDS refund cannot be claimed while filing your tax return in India.

The writer is Partner, Deloitte India

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Published on November 30, 2020
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