TAX TALK-21.11.2011-THE HITAVADA
TAX TALK-21.11.2011-THE HITAVADA
TAX TALK
BY CA. NARESH JAKHOTIA (Chartered Accountant)
“TDS CERTIFICATE NOT ISSUED DESPITE MANY REMINDERS & REQUESTS”
Query 1]
One of my relatives who is a Govt. employee, tax payer, purchased of plot in the year 1995 with a cost of Rs. 54,000/- and spent some money for boundary wall of Rs. 21,000/- (Total expenditure was Rs, 54,000/- + Rs. 21,000/- = Rs. 75,000/-). Now (2011), he has sold that plot with a cost of Rs. 15,00,000/-.
My questions are as follows:
1. How much he has to pay the tax?
2. If he invests the whole money in MIS, or some bonds, etc, still he has to pay tax?
3. What are ways to avail the tax benefit?
4. If he purchases a flat/plot with the sale proceeds of his plot, still he has to pay some tax?
5. Is it called capital gain? I request you if you could guide something. [susantakumardutta@yahoo.com]
Opinion:
It is presumed that a) The plot is purchased in the FY 1994-95.(If it is purchased in F.Y. 1995-96, “259” used below shall be replaced by “281”) b) The Stamp duty valuation of the plot transferred is not exceeding Rs. 15 Lacs. (If the Stamp Duty valuation exceeds Rs. 15 Lacs, capital gain would be required to be computed by taking such higher value)
Cost Inflation Index (CII) for the relevant F.Y. 1994-95 & F.Y. 2011-12 are “259” & “785” respectively.
LTCG on sale of plot shall be Rs. 12.73 Lacs [ i.e., Rs. 15 Lacs Less ( 0.75 Lacs * 785 / 259). Capital gain tax is payable @20%.
Long Term Capital Gain arising on sale of plot can be saved by opting for an exemption u/s 54F and/or U/s 54EC.a) U/s 54F: For exemption u/s 54F, subject to various other terms / stipulations, your relative would be required to invest the amount of net sale consideration for purchase of a residential house property within a prescribed period. Exemption u/s 54F is available on the basis of net sale consideration invested (& not on the basis of LTCG earned). If entire net sale consideration is not invested, exemption will be available on proportionate basis.b) U/s 54EC:To save LTCG tax u/s 54EC, one has to invest the amount of Long Term Capital Gain (LTCG) within a period of 6 months from the date of sale/transfer of assets in the specified bonds issued by REC/NHAI. There is a maximum ceiling of Rs. 50 Lacs in a financial year for investment in 54EC Bonds.
There is no exemption if the capital gain or the sale proceeds is invested in the MIS or bonds other than 54EC Bonds mentioned above. The income arising on sale of capital assets (like plot, in the given case) is considered as capital gain income.
Query 2]
By profession, I am a Post Office agent. I do business every year & on the commission received, the post office deducts T.D.S. on regular basis. Now, I want to file my I.T return. For this, I have asked for T.D.S. certificate to the post office, but they have asked me to give the details of business done by me in the previous financial year. As far as my knowledge is concerned, maintaining of T.D.S. record is a part of the post office job. Kindly suggest me how can I file my return without getting the T.D.S. certificate? Kindly tell me the what kind of punishment and fines can be imposed on post office for not maintaining T.D.S on commission given to agents and for harassing for the same? Looking for your advice at the earliest.
[aqualai@yahoo.com]
Opinion:
The person deducting the tax at source is duty bound to:
a. Deposit the tax deducted at source within prescribed time to the Government Treasury.
b. File the Quarterly TDS return in respect of the Tax Deducted
c. Issue the TDS Certificate to the Deductee within a prescribed time.
For non compliance of each and every part mentioned above, there is a separate penalty and consequences under the Income Tax Act-1961.
For non issuance of TDS Certificate within a prescribed time, penalty is imposable u/s 272A (2) @ Rs. 100/- per day during which the failure continues. However, the amount of penalty cannot exceed the amount of tax deductible/deducted.
For non filing of TDS Return also, there is a penalty provision of Rs 100 per day.
Without Quarterly TDS Return being filed by the Deductor, you will not be entitled for the Tax Credit in respect of TDS done from payment made to you.
In your case, you should have been issued the TDS Certificate within the prescribed time by the Tax Deductor. However, there is a general grievance that in many cases the Tax Deductor do not issue TDS certificate despite the fact that many requests & reminders are given by the Deductees for such issue of certificates. In such cases, Deductee can follow the following approach:
1. Write a letter to the Deductor incorporating:a] The details of payments done to you and the tax deducted there from.b] Provision of Section 203 which requires the Deductor for issue of tax certificate within one month from the date of tax deduction
2. Keep the proof of letter issued to the Deductor
3. If despite this, the certificate is not issued, write a letter to Joint Commissioner or Addl. CIT of TDS wing who has jurisdiction over the Deductor mentioning the detailed facts elaborated above.
You can also view all the tax deducted & deposited in your account [i.e. Tax Credit in Form No. 26AS] by registering your PAN at www.incometaxindia.gov.in.
TAX TALK
BY CA. NARESH JAKHOTIA (Chartered Accountant)
“TDS CERTIFICATE NOT ISSUED DESPITE MANY REMINDERS & REQUESTS”
Query 1]
One of my relatives who is a Govt. employee, tax payer, purchased of plot in the year 1995 with a cost of Rs. 54,000/- and spent some money for boundary wall of Rs. 21,000/- (Total expenditure was Rs, 54,000/- + Rs. 21,000/- = Rs. 75,000/-). Now (2011), he has sold that plot with a cost of Rs. 15,00,000/-.
My questions are as follows:
1. How much he has to pay the tax?
2. If he invests the whole money in MIS, or some bonds, etc, still he has to pay tax?
3. What are ways to avail the tax benefit?
4. If he purchases a flat/plot with the sale proceeds of his plot, still he has to pay some tax?
5. Is it called capital gain? I request you if you could guide something. [susantakumardutta@yahoo.com]
Opinion:
It is presumed that a) The plot is purchased in the FY 1994-95.(If it is purchased in F.Y. 1995-96, “259” used below shall be replaced by “281”) b) The Stamp duty valuation of the plot transferred is not exceeding Rs. 15 Lacs. (If the Stamp Duty valuation exceeds Rs. 15 Lacs, capital gain would be required to be computed by taking such higher value)
Cost Inflation Index (CII) for the relevant F.Y. 1994-95 & F.Y. 2011-12 are “259” & “785” respectively.
LTCG on sale of plot shall be Rs. 12.73 Lacs [ i.e., Rs. 15 Lacs Less ( 0.75 Lacs * 785 / 259). Capital gain tax is payable @20%.
Long Term Capital Gain arising on sale of plot can be saved by opting for an exemption u/s 54F and/or U/s 54EC.a) U/s 54F: For exemption u/s 54F, subject to various other terms / stipulations, your relative would be required to invest the amount of net sale consideration for purchase of a residential house property within a prescribed period. Exemption u/s 54F is available on the basis of net sale consideration invested (& not on the basis of LTCG earned). If entire net sale consideration is not invested, exemption will be available on proportionate basis.b) U/s 54EC:To save LTCG tax u/s 54EC, one has to invest the amount of Long Term Capital Gain (LTCG) within a period of 6 months from the date of sale/transfer of assets in the specified bonds issued by REC/NHAI. There is a maximum ceiling of Rs. 50 Lacs in a financial year for investment in 54EC Bonds.
There is no exemption if the capital gain or the sale proceeds is invested in the MIS or bonds other than 54EC Bonds mentioned above. The income arising on sale of capital assets (like plot, in the given case) is considered as capital gain income.
Query 2]
By profession, I am a Post Office agent. I do business every year & on the commission received, the post office deducts T.D.S. on regular basis. Now, I want to file my I.T return. For this, I have asked for T.D.S. certificate to the post office, but they have asked me to give the details of business done by me in the previous financial year. As far as my knowledge is concerned, maintaining of T.D.S. record is a part of the post office job. Kindly suggest me how can I file my return without getting the T.D.S. certificate? Kindly tell me the what kind of punishment and fines can be imposed on post office for not maintaining T.D.S on commission given to agents and for harassing for the same? Looking for your advice at the earliest.
[aqualai@yahoo.com]
Opinion:
The person deducting the tax at source is duty bound to:
a. Deposit the tax deducted at source within prescribed time to the Government Treasury.
b. File the Quarterly TDS return in respect of the Tax Deducted
c. Issue the TDS Certificate to the Deductee within a prescribed time.
For non compliance of each and every part mentioned above, there is a separate penalty and consequences under the Income Tax Act-1961.
For non issuance of TDS Certificate within a prescribed time, penalty is imposable u/s 272A (2) @ Rs. 100/- per day during which the failure continues. However, the amount of penalty cannot exceed the amount of tax deductible/deducted.
For non filing of TDS Return also, there is a penalty provision of Rs 100 per day.
Without Quarterly TDS Return being filed by the Deductor, you will not be entitled for the Tax Credit in respect of TDS done from payment made to you.
In your case, you should have been issued the TDS Certificate within the prescribed time by the Tax Deductor. However, there is a general grievance that in many cases the Tax Deductor do not issue TDS certificate despite the fact that many requests & reminders are given by the Deductees for such issue of certificates. In such cases, Deductee can follow the following approach:
1. Write a letter to the Deductor incorporating:a] The details of payments done to you and the tax deducted there from.b] Provision of Section 203 which requires the Deductor for issue of tax certificate within one month from the date of tax deduction
2. Keep the proof of letter issued to the Deductor
3. If despite this, the certificate is not issued, write a letter to Joint Commissioner or Addl. CIT of TDS wing who has jurisdiction over the Deductor mentioning the detailed facts elaborated above.
You can also view all the tax deducted & deposited in your account [i.e. Tax Credit in Form No. 26AS] by registering your PAN at www.incometaxindia.gov.in.
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