Ask The Tax Expert

Question: I switched companies last year and thus have 2 form 16. Please advice how to go about it.

Answer: It does not matter how many employers you changed during last year, you will still file each form individually. Go to TaxYogi and enter all Form 16s when asked. The system will calculate the rest for you. Filing of Income Tax Returns (ITR) is mandatory if your total income for the previous year has exceeded the maximum exemption limit. The last date of filing income tax returns for individuals has been extended to the 4th of August.

You can also get ahead of 2010-11 taxes by using InvestmentYogi’s Tax Planner. Let our experts guide you through all the tax savings options available to you!

Warm Regards,

Expert @ TaxYogi

Question: What is the difference between residential status and citizenship status?

Answer: Residential status is required for the purpose of tax filing - it is basically required to know the actual place of stay by the individual during the financial year for calculation of tax liability. On the other hand, Citizenship status applies to the country of which the individual belongs or is a citizen of. Citizenship status is usually required to be indicated at the time of applying for a job, whereas residential status is required to be indicated at the time of tax filing every year.

Click here to help you find out your Residential Status.

Warm Regards,

Expert @ TaxYogi

Question: Hi.  What should be the Ward/Circle Number while filling up the ITR 1 form? The Income Tax website says that it should be the one where you submit your returns. But what if I am submitting returns online? Also, if I am in Delhi and PAN was made in some other city, what will be my area of jurisdiction to find out the ward/circle number? Thanks.

Answer: You may find out Assessing Officer (AO) code with the help of your nearest IT PAN Service Center or TIN Facilitation Center or jurisdictional Income Tax Office. You may also click on the following link to view it online:

https://incometaxindiaefiling.gov.in/portal/common.do?screen=jurisdiction

You  will need to enter your PAN number in order to view your jurisdiction code.

Warm Regards,

Expert @ TaxYogi

Question: Is interest earned in an NSC (National Savings Certificate) account eligible for tax deduction under section 80C?

Answer: Interest earned in an NSC account is treated as re-investment or fresh investment and is eligible for deduction under section 80C to up to Rs 1 lakh p.a.

Click here to know all about National Savings Certificates (NSC) Investments.

Warm Regards,

Expert @ TaxYogi

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Question: Dear Sirs, I understand that one can get capital gains tax exemption from the sale of the residential house, by purchase of another residential house within the stipulated period.  My query is that if I purchase a second hand residential flat, can I get LTCG tax exemption on all of the following -

                                
a) sale deed amount of the flat to be purchased
b) amenities cost which includes existing fittings, fixtures, existing wood work etc of the flat to be purchased
c) registration fee and stamp duty for purchase of the flat

                
Thanks in advance for your quick reply.

Answer: We are assuming that you would like to sell the existing residential house to purchase a new one within the stipulated period. In such a case, actual expenditure incurred on the purchase of new house (sale deed for new house, registration, stamp duty only) will be allowed as deduction. Amenities cost will not be included as cost of acquisition.

Warm Regards,

Expert @ TaxYogi

Question: My refund is pending since last five years, please advice.

Answer: Yes. You can follow up with your concerned IT ward officer.

You can now check the tax refund (payable to you) online - Income Tax department has introduced a new facility this financial year 2009-10 (AY 2010-11) for viewing your tax payments made - it is called FORM 26AS.

The Tax credit Statement (Form 26AS) helps taxpayers in -

1. Preparing income tax returns
2. Verifying details of tax deducted at source (TDS)
3. Verifying details of tax collected at source (TCS)
4. Verifying details of tax payment made by the taxpayer (advance tax, self-assessment tax, regular assessment tax, etc.)
5. Viewing details of tax refunds (if any)

This facility is available only to e-filers registered at Department of Income Tax's (DIT) e-filing site or www.tin-nsdl.com - the Tax Information Network (TIN) maintained by National Securities Depository Limited (NSDL). The facility provided by both websites is totally free.

Below are the 3 simple steps to view and download one's Form 26AS through 'DIT e-filing website':

STEP-1: Register at DIT e-filing website. Login and click on "My Account". Under 'My Account', select "View Tax Credit Statement (Form 26AS)".

STEP-2: Once you click on the above link, you will be asked to provide your DOB (Date of Birth) for verification purposes.

STEP-3: You will be redirected to the NSDL website to view/download Form 26AS (Tax Credit Statement).

Warm Regards,

Expert @ TaxYogi

Question: As for the Annual Information requirement, item 5, I have a query please. "Purchase of Shares of a company (including right shares) worth Rs.1 Lakh or more" covers what?  Does it cover only purchase of shares from public issue shares or rights issue shares of a company? I make this query, because I have until now believed that it does not apply to shares purchased through stock exchanges in either of the following cases: When a single purchase through the stock exchange exceeds Rs.1 Lakh in a company, or the aggregate purchases in a company through the stock exchange during the financial year exceeds Rs.1 Lakh in that company?  I have until now believed that it covers only the public issue from a company or rights issue from a company. Am  right in my belief, or am I wrong, which is the correct view?

Answer: Item no 5 requires you to furnish the following - Any payments made by you of an amount of one lakh rupees or more for acquiring  shares (fresh purchase irrespective of rights issue or an IPO) issued by a company - such fresh investment made in each company during the financial year is to be reported.

The same is available on the instructions page of ITR-2.

Warm Regards,

Expert @ TaxYogi

Question: For a non-resident Indian, filing ITR2 in India, is it necessary to show the salary income earned abroad since it is totally tax-free? 

                                              
Similarly, for interest earned on bank FDs, is it enough to show the interest earned on NRO FD (without showing the interest earned on NRE FD since this interest income is totally tax-free). Thank you in advance for your kind attention to this query.

Answer: Regarding your query on entering salary earned abroad - any income earned/received abroad by an NRI is not taxable income in India. However, you need to mention the same as exempt income under 'schedule EI' of ITR-2.

Interest earned on NRO FD and NRE FD. Although, only NRO FD is taxable, you need to mention the interest earned on NRE FD as exempt income under 'schedule EI' of ITR-2. 

Also, cash deposits aggregating to ten lakh rupees or more in a year in any savings account held by you maintained in a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applied (including any bank or banking institution referred to in section 51 of that Act) needs to be entered by you in the relevant ITR under the heading 'Annual Information Return (AIR)'.

Warm Regards,

Expert @ TaxYogi

Question: I am a salaried employee, I don't have Form 16, how can I file my return?
                                             

Answer: You can file your IT Return without a form 16 - through TaxYogi. All you need to do is to select 'Do not have form 16' in the tax filling pages.

Warm Regards,

Expert @ TaxYogi

Thank you for writing in to us. Below is the answer to your query.

                                                             
Question: Is it necessary to invest only in agricultural land if capital gain is being occurred by sell of agricultural land.

                                                                  
Answer: Unfortunately, yes. As per section 54B of the Income Tax Act, 1961, in case the property sold was used for agricultural purposes only, for at least 2 years before the date of its sale, the long term capital gains arising from the same will have to be used for purchase of another agricultural land only within 2 years from the date of sale of original property in order to avail capital gains exemption on the same.

Warm Regards,

Expert @ TaxYogi

Question: I am an individual having income from salary and getting rent from business property. Which form do I need to file?

                                                       
Answer: Income from business property (other than held as stock in trade) is considered as income from house property itself. In case of 1 house property you may choose ITR 1 and in case of more than 1 house property you may choose ITR 2.

Warm Regards,

Expert @ TaxYogi

Question: Respected Sir, I want to fill my IT return online but my income is not more than Rs 150,000. I have pan a card.

Answer: Filing of Income Tax Returns (ITR) is mandatory for every individual whose total income for the previous year or financial year has exceeded the maximum exemption limit. The last date of filing income tax returns for individuals is 31st July each year.

In your case, since your income is below the maximum exemption limit, it is not mandatory for you to file your ITR. However, filing your ITR does have advantages. For more enquires click the following: ask@incomtaxindia.gov.in.

Warm Regards,

Expert @ TaxYogi

Question: Can I show the bank interest accumulated in our joint EOS account with my spouse to my spouse's income?

Answer: Following is the tax treatment -

i) In case your spouse is joint account holder 'in name only' and does not make any deposits or income (such as salary credit) - income earned on the same will be taxable in your hands;

ii) In case both of you are making deposits or earning income (such as salary credit) - such interest earned on the account needs to be apportioned on the basis of each person's contribution in the account.

Generally interest will be added in the return of the person whose name appears first in the bank account.

Warm Regards,

Expert @ TaxYogi

Question: Last year I had registered with my PAN number with the DEPPT official site. Now I have forgotten my ID and password both. Kindly advise me.

                                                                                
Answer: For password reset at Income Tax site a user should send a mail to efiling@incomtaxindia.gov.in with the PAN number. For other queries the email id is ask@incomtaxindia.gov.in.

Warm Regards,

Expert @ TaxYogi

Question: Our Drawing and disbursement officer (DDO) has not included/calculated relief under section 89 in form 16. When I calculated relief under section 89 it is Rs 7454 but our DDO does not want to issue revised form 16. Please advise me how can I get above.

Answer: Under 192 (2A) of the Income Tax Act, 1961, where the assessee (you), being a Government servant or an employee in a company, co-operative society, local authority, university, institution, association or body is entitled to the relief under Section 89 (1), he may furnish to the person responsible for making the payment (your employer) such particulars in Form No. 10E duly verified by him, and thereupon your employer shall compute the relief on the basis of such particulars and take the same into account in making the deduction.

You can have your own calculation for the ITR. In case your DDO is not agreeing on including relief benefit, you can claim the same while filing your Income tax return  by showing the refund.

Warm Regards,

Expert @ TaxYogi