“WHICH ITR FORMS IS TO BE USED FOR FILING INCOME TAX RETURN?”


TAX TALK-31.12.2012-THE HITAVADA

TAX TALK  
BY CA. NARESH JAKHOTIA
Chartered Accountant

“WHICH ITR FORMS IS TO BE USED FOR FILING INCOME TAX RETURN?”

Query 1]
I had deposited Rs. 10,00,000/- in IDBI Bank, Nagpur on 19-01-2011. Being Senior citizen of 85 years, I submitted Form No. 15H on 19-01-2011, 21-04-2011 & 07-04-12 for the F.Y. 2010-11, 2011-12 and 2012-13 respectively which were duly acknowledged by the bank . Still TDS was deducted twice and subsequently refunded in my S.B. A/c. Instead of giving full maturity value Rs. 11,41,184/- on 02-06-2012, I was paid as under in my S.B. A/c:
1. On Maturity         :           Rs. 11,35,759            on 02-06-12
2. TDS Refund          :           Rs. 2,438/-                 on 25-06-2011
3. TDS Refund          :           Rs. 2,678/-                 on 07-05-2012
        Total                  :           Rs. 11,40,875/-
Thus I was paid Rs. 309/- less. I feel that 15H forms were correctly submitted and as the tax deducted amounts were not paid to the Government. I was entitled for full maturity amount. When I visited the bank for inquiry, one of the officers said that TDS was deducted from Principle amount on 19-04-2011 for the quarter ending 19-04-2011 as 15H was submitted late on 21-04-2011 for F.Y. 2011-12. As TDS was deducted from Principle Amount, it was reduced to that extent and hence interest thereon was reduced by Rs. 309/-.
The TDS should have been deducted from accrued interest and the same amount credited to S.B. A/c on receipt of 15H form as I was not satisfied by the reply given by Bank officer. I wrote to H.O on 23.06.2012 but no reply was received. I contacted the Manager of Local branch on 21.11.2012. Instead of giving credit of Rs. 309/-, he had shown me how the diff. of Rs. 309/- has arisen The details given by him are enclosed for your perusal. Kindly throw light on this issue in Tax-Talk at your earliest. [S.M.Patil, M-2’Sarang’, Tatya Tope Nagar, W.H.C. Road, Nagpur-15]
Opinion:
1.      You have timely submitted Form No. 15H to the bank during the relevant financial year. The bank has wrongly deducted the amount of Tax (TDS) from your interest accrual.
2.      After realizing the mistake, the bank has courteously returned the same to you by crediting the same to your saving bank account.
3.      It appears that the bank, instead of returning the amount of TDS to you by crediting your saving bank account, should have retained the amount and credited it to the FD (or Interest payable) A/c only. Since, the bank had already repaid the interest (TDS) to you by crediting to your saving bank A/c, they are probably finding it difficult to pay the interest on Interest (Since the same has been already paid to you).
4.      Had they retained the amount, you would have got the interest on interest and it would have resulted in the maturity amount same as documented originally.
5.      As far as the amount of Rs. 309/- is concerned, it appears that the loss is there for no fault at your end.

Query 2]
My wife has received Rs. 1.40 Lacs from her mother-in-law as Gift. My query is, since the Gift up to Rs. 50,000/- is tax-exempt, whether the amount in excess is taxable or the aggregate will be taxed? [Vedant-vdpankey@rediffmail.com]
Opinion:
1.      In normal course, where the aggregate value of gift received from non-relative exceeds Rs.50,000/-, the entire amount of gift would be taxable (& not merely an amount in excess of Rs. 50,000/-).
2.      The gift received by Daughter-in-law from her Mother-in-law is treated as gift from relatives and accordingly nothing would be taxable in the hand of Daughter-in-law on the amount so gifted by mother-in-law.
3.      A word of Caution:
Any income arising from the assets transferred (which includes gift also) to Daughter-in-law without adequate consideration is subjected to clubbing provision and is taxable in the hands of the transferor and not in the hands of transferee. [Section 64(1)(vi) of the Income Tax Act-1961].

Query 3]
I would like to know about the ITR e-filling process for the persons who are paying housing loan repayment. Which ITR form, they have to use while e-filing  their income tax return (either ITR-1 or ITR-2)? Please advice me. [sharveshjay@yahoo.com]
Opinion:
1.      ITR-1 can be used for return filing if the assessee is having income from salary, house property & income from other sources.
2.      ITR-1 cannot be used by if assessee has:
a] Income from more than one house property.
b] Income from Lottery or Race course
c] Taxable Capital Gain
d] Agricultural Income exceeding Rs. 5,000/-
e] Income assessable under the head “Income from Business/ profession”

If individual assessee have income of the nature referred in (a) to (e) above, then
i] Return would be required in ITR-2 if there is no income chargeable under the head “Income from Business/ Profession”.
ii] Return would be required to in ITR-4 or ITR-3 if there is income chargeable under the head “Income from Business/ Profession”.


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