Your questions: Income tax | The financial express
By Chirag Nangia
*I opted for the new tax regime at the beginning of the year 2021-22 and there is an excess tax deduction. How do I switch to the old tax regime when filing the ITR?
It has been clarified by the CBDT that the notification to the employer declaring his intention to opt for the preferential tax regime must only be made for the purposes of the TDS, which cannot be modified during the year. However, when filing the tax return, you can switch to the old system. Thus, the options at the time of filing the return may be different from the notice given by the employee to the employer. The ITR form asks for the individual’s choice and the tax is calculated accordingly. The TDS exceeding the final liability (noted after taking into account the deductions/exemptions allowed), may thus be claimed for reimbursement by opting for the old regime of the RIR.
* I am a 79 year old female. My husband had purchased revenue land 40 years ago and after his death in 1991 the property was transferred to my name. I built a small house and sold it last year. I am `18 lakh. I am a family pensioner and I have income from FD. Do I need to file an ITR for this transaction and how can I save tax?
— Sharadamba N.
As the property has been held for more than 24 months, the capital gain on sale is qualified as long-term capital gain (LTCG). As you inherited the property, the cost of acquisition will be the greater of the actual cost to your husband or the FMV as of April 1, 2001. Any cost incurred thereafter is treated as “improvement cost”. These two costs must be subtracted, after indexation, from the sale value to arrive at the taxable capital gains. If this LTCG is invested for the purchase of a house (within two years from the date of transfer) or for the construction of residential accommodation (within 3 years from the date of transfer), it will then be exempt from tax.
Also, the exemption limit for filing RTI FY22 for people over 60 years old is `3 lakh. If your total income is greater than this, you must disclose details of all income earned, including details of this sale in ITR 2.
The screenwriter is the director, Nangia Andersen LLP. Send your questions to [email protected]