Dear friends, ITR Filing season is on and taxpayers are busy in arranging documents that are required while filing Income Tax return. In the past 5-6 years a growing trend has been seen in number of taxpayers filing ITR. Each year many new taxpayers are starting Income Tax return Filing. In today’s article, we will discuss about some commonly asked FAQ’s which are asked by clients. Also Read: Frequently Asked Questions while Filing Income Tax Return (Part-2)
Q.1 In earlier years, I have not filed my ITR. This year I purchased a car worth Rs.19 lakhs using a cheque or NEFT, will I be getting an income tax notice from Income Tax department. Further, at the time of purchased of Car, dealer has charged TCS on my invoice, whether I will get refund of this TCS Paid?
Ans. If you purchase a car in excess of rupees 10 lakh then the seller will charge TCS and deposit the TCS amount against your PAN number. If you are filing ITR which is not supporting the purchase value of car (for example you are filing an ITR of rupees 300000 and purchasing a car worth rupees 20 lakh) then it may invite notice from income tax department because you have not any previous income tax record as per department database. Further, TCS paid by you at the time of purchase of car will be claimed while filing Income Tax return.
Q.2 What should I do if I get an income tax notice regarding a high value transaction which describes ‘payment made in respect of credit card’? Credit card is in my name but transactions are made by friends, relative and credit card payment is also made by them.
Ans. Firstly check whether transactions shown by income tax notice belongs to you or not. If it belongs to you, then you should accept the same transaction through insight portal. If not belongs to you then decline the same. No reply may invite penal action from department. Further, as credit card is issued on your name then primary responsibility of these transaction lies on you. Consult with professional to present your case in proper manner.
Q.3 If a person wins Rs.10 lakh from Dream11, should he/she file it in his/her income tax?
Ans. Yes, he/she is required to file ITR. In the past year, taxpayers who are engaged in rummy/ cricket games cases are selected for scrutiny assessment, due to non disclosure of these gaming app transaction in their ITR.
Q.4 My landlord is not willing to share her PAN card however has shared her PAN number. Company is not giving the HRA exemption without having the PAN card of landlord. Is there any way I still claim the HRA exemption?
Ans. If you have PAN Number of landlord and made her payment by banking channel, then you can claim HRA at time of ITR Filing. You will get the refund of excess tds deducted by your employer.
Q.5 I have invested in Share market but I do not want to disclose this information in my ITR. What will happen if I don’t mention short term capital gain in ITR in India and how will the IT department know that I gained from market? Does the stock broker report it to the IT department about capital gains?
Ans. After the introduction of AIS/ TIS Report, hiding capital gain earned from Share market is not possible. Depository like CDSL are covered under SFT Reporting. Even if you invest Rs.2000/- in equity shares/ mutual fund then Depository is showing these transactions against your PAN Number. In few cases, it is observed that many taxpayers are still not showing these transactions in their ITR and department has start sending messages/ mail to these tax payers reminding that ITR Filed by them are not in line with information available with department.
So, it is good to report all share market related transactions in your ITR even if they are not appearing in AIS/ TIS Report as of now. If department catches these transactions at later stage then your case may be selected for scrutiny or department may pass Best judgement Assessment order which will be very harsh for the assessee.
Q.6 I am running a Proprietorship firm; can I include my personal expenses in a sole proprietorship?
Ans. Personal expenditure are not allowed as expenditure in business. However, if you incurred any expenditure which is for benefit of business can be claimed as expenditure.
Q.7 During the last year, I have purchased a house Property worth Rs. 1 Crore, down payment is made from my funds and rest is made by bank as house property loan, whether I have to show this house property in my Income Tax return?
Ans. As per ITR Forms, if a person’s income is more than Rs.50 Lakh per Annum then he has to make additional disclosures in his ITR related to Assets and liabilities owned/ payable by him as of 31st March in Schedule AL.
In Part A of Schedule AL – a person has to give disclosure related to the Immovable Property (Description, Address, and Value of Immovable Property.)
In Part B of Schedule AL – a person has to disclose related to movable Property held by him in the form of Jewelry, bullion, drawing, painting, vehicle, shares, insurance, cash and bank balance, etc.
In Part C of Schedule AL – a person has to give details of loans and liabilities related to assets held in Part A and Part B of Schedule AL.
Here, it must be noted that this disclosure is required only in case the Income is more than Rs.50 Lakh per annum. No need to give disclosure if income is below the prescribed Limit.
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Disclaimer: This article is for the purpose of information and shall not be treated as solicitation in any manner and for any other purpose whatsoever. It shall not be used as legal opinion and not to be used for rendering any professional advice. The author will not be held responsible for any loss, if occur after using above information. Kindly consult your professionals before taking any action. This article is written on the basis of author’s personal experience and provision applicable as on date of writing of this article. Adequate attention has been given to avoid any clerical/arithmetical error, however; if it still persists kindly intimate us to avoid such error for the benefits of others readers. The Author “CA Shiv Kumar Sharma” can be reached at Mobile/WhatsApp–9911303737.
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My friend received ex gratia payments towards salary arrears of her late husband who was working for Canara Bank. Please enlighten whether the same are taxable. thank you in advance