Your questions: Income tax – Capital gains on the sale of an apartment to be displayed in ITR in the year of the sale

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Alternatively, if the difference is substantial, you can contact the bank and have the details corrected.

By Chirag Nangia

I bought an apartment in December 2020 using the capital gain accrued from my previous sale of a property. How can it be displayed in my ITR?
—PK Ramesh
To benefit from the exemption provided for in article 54, capital gains realized on the sale of real estate must be reinvested in new residential accommodation within 2 or 3 years. However, since the deadline is long and capital gains must be declared in the year of the sale, the funds must be parked in the Capital Gain Account Scheme and the exemption applied.

Thus, the details of the sale of the property and the subsequent investment in a new home (cost of the new property, date of purchase or construction / amount of unused capital gain deposited in the Capital Gain Account Scheme) must be disclosed in the income tax return for the year in which the capital gain is realized (i.e. the year of the sale). No disclosure is required on subsequent purchase
of property.

VRS, PPF and bonuses received at retirement are not reflected in Form 16 A / B. How can I display them in ITR and get an exemption?
—G Pradhan
In the hands of civil servants, gratuities and receipts for retired FPs are tax-exempt. In the hands of non-government employees, the gratuity is exempt subject to the limits prescribed in the Information Technology Act and PF receipts are tax-exempt, if they are received from a recognized PF after rendering continuous service of at least five years.

Even though the amounts are not reflected on Form 16A, they must be disclosed on the income tax return. Details should be provided by selecting the appropriate category under the “Exempt Income” tab under the salary item of the corresponding RTI form. If disclosed as such, the ITR utility will not include it in taxable income.

There is a difference between interest and TDS on FD received and displayed in Form 26 AS. What number should I take to deposit my RTI?
—Arun Bansal
In the event that the income declared in the 26AS form does not correspond to the amount actually received, it is prudent to declare the higher of the two amounts to avoid any request from the tax service. Alternatively, if the difference is substantial, you can contact the bank and have the details corrected.

The writer is director, Nangia Andersen India. Send your questions to [email protected]

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