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Tejas Chokshi

Tax Expert 

126 Answers | 15 Followers

CA Tejas Chokshi has over 20 years of experience in financial planning, income tax planning, strategic and risk advisory, banking and financial products and accounting and auditing.
He is an information system auditor, a forensic auditor and concurrent bank auditor.
Chokshi, who has a master’s degree in management, audit and accounting from Gujarat University, has completed his CA from the Institute of Chartered Accountants of India.... more

Answered on Sep 11, 2023

Asked by Anonymous - Aug 02, 2023
If one does intraday trading in shares- the profit made is directly taxed as per his income slab. If he makes a loss- how is it treated in income tax? Also, is there any other implications like turnover tax or audit by CA on the total trade value involved at the time of filing IT returns?
Ans: Intraday trading is subject to specific tax rules and regulations. Here's how profits and losses from intraday trading are treated for income tax purposes, along with information on turnover tax and tax audits:

Tax Treatment of Intraday Trading Profits and Losses:

Profits: Profits made from intraday trading are considered as speculative business income in India. These profits are added to your total income and are taxed as per your applicable income tax slab rates.

Losses: Intraday trading losses can be treated in two ways:

Set Off Against Speculative Business Income: You can set off intraday trading losses against any other speculative income you have earned during the same financial year.
Carry Forward of Losses: If you are unable to set off the entire loss in a given financial year, you can carry forward the remaining loss for up to four assessment years. This can be adjusted against any speculative business income in those years.
Turnover Tax:

In India, there is no specific turnover tax on intraday trading. However, you may be subject to other charges and taxes, such as Securities Transaction Tax (STT), brokerage charges, and other regulatory fees.
Tax Audit:

In India, if your turnover from intraday trading exceeds a certain threshold, you may be required to get your accounts audited by a Chartered Accountant (CA) under Section 44AB of the Income Tax Act.
The limit is 1 cr for FY 2022-23. This limit may change over time.
Documentation and Compliance:

It's crucial to maintain proper records of all your intraday trading transactions, including contract notes, bank statements, and other relevant documents.
Ensure that you file your income tax returns accurately and disclose your speculative income, losses, and other financial details as required by the tax authorities.

Answered on Aug 29, 2023

Answered on Aug 07, 2023

Hi sir. Hope alls well with you n ur family. Sir i am a 75 year old lady living in south mumbai. I hav given my PAGRI flat of which I am BENIFICIARY OWNER / SOLE TENANT on rent to my grandson for 49,500 per month. He is claiming HRA on same. For proof he is submitting rent agreement between him and me on notarized stamp paper, Electric bill which is on my name for ownership proof of said flat, My Pan card and bank passbook xerox of both of us showing rent given by him and received by me, To his company. I am also filling my IT return and showing rent as my income. Now i hear that pagri flats cannot be given on rent. Hav no other source of income. Pls advise. Greatfully yours ZARINA.
Ans: "Pagri flats" typically refer to properties where the tenant (in this case, you) pays a lump sum amount to the landlord (previous owner) as a security deposit, and then the tenant continues to live in the flat without any formal lease agreement. The ownership and legal status of Pagri flats can be complex and may vary depending on local laws and regulations.It's important to clarify the legal status of the Pagri flat in terms of its rentability. If Pagri flats are not legally allowed to be given on rent in your area, you might need to address this situation. In many cases, renting out properties in violation of local regulations can have legal consequences. From a tax perspective, if you are indeed receiving rental income from your Pagri flat, you should be reporting it in your income tax return. You can offset this income by claiming deductions on expenses related to the property, such as maintenance, repairs, and property taxes. However, if the property is not legally rentable, there could be complications in terms of both tax and legal compliance.
Your grandson claiming HRA (House Rent Allowance) for the rent he's paying you might raise concerns if the property is not legally rentable. HRA is usually claimed when an individual pays rent to a landlord other than a close relative. Since you are his grandmother, the relationship might fall under the category of a close relative.

Answered on Aug 07, 2023

Sir, during this month (August2023) I sold my flat which was purchased by me in 2010. The total sale consideration as per govt guidelines was Rs 5973000/ and was registered at that amount, accordingly TDS at 1% on it was deducted at Rs 59730 and was credited to the govt account. My query is , TDS on sale of property at 1% is applicable in case the amount of sale exceeds Rs 50.00 lakhs . Whether the TDS is applicable on full sale consideration or on the difference amount ie, (5973000-500000)Rs 973000. 2. I had purchased the flat in April 2010 and the purchase price was Rs 3150000/ including Stamp duty, Registration charges and small amount towards interior work. I request you to advise me the applicability of Capital Gain Tax on it. Now I do not want to invest in any new property or in Capital gain bonds, I want to pay the applicable tax and close the transaction. Please advise me about the applicable Tax and close the formalities applicable in this regard. Siddramappa Kudarimoti.
Ans: The TDS (Tax Deducted at Source) of 1% on the sale of property exceeding Rs 50 lakhs is applicable on the full sale consideration. In your case, since the total sale consideration was Rs 5,973,000, the TDS of Rs 59,730 was deducted as per the guidelines. Based on the information you've provided, you might be liable for Capital Gains Tax. Capital Gains Tax is calculated based on the difference between the selling price and the indexed purchase price. The indexed purchase price adjusts the original purchase price for inflation over the holding period.
The tax on long-term capital gains is usually 20% (plus applicable surcharge and cess) after considering any exemptions or deductions available under Section 54 or Section 54F if you are not investing in another property or capital gains bonds.

To close the transaction and fulfill your tax obligations, you should consider the following steps:

a. Calculate Capital Gains: As explained above, calculate the capital gains based on the indexed purchase price and selling price.

b. Pay Capital Gains Tax: If you decide not to invest in another property or capital gains bonds, you will need to pay the applicable capital gains tax. You can do this by filling out the appropriate sections in your income tax return and paying the tax amount.

c. File Income Tax Return: Ensure that you accurately report the capital gains in your income tax return for the assessment year.

d. Keep Documentation: Maintain all relevant documents related to the property sale, purchase, and tax calculations for future reference

Answered on Jul 22, 2023

Asked by Anonymous - Jul 20, 2023
Tejas ji, I am a teacher by profession. Last FY, I opted for the old tax scheme and using all available options brought my taxable income to just under 5 lakhs. So no TDS was deducted by my employer. However, in March 2023, I withdrew Rs. 65000 from my tax saver mutual fund due to urgent needs. Can you please tell me if there is any tax due coz of this withdrawl? Which ITR form do I need to file this year?
Ans: Respected Sir,

you may file either ITR- 1 or ITR-2 depending on the complexity of the income. Yes, the lock in period of 3 years applies on ELSS schemes and if withdrawn before that it would attract taxability. Please look at the below a detailed note, which would be helpful to you. Withdrawal from Tax Saver Mutual Fund: If you made a withdrawal of Rs. 65,000 from your tax saver mutual fund, it's important to note that withdrawals from equity-linked saving schemes (ELSS) are subject to tax implications.

- ELSS investments have a lock-in period of three years. Withdrawals made before the completion of the lock-in period are considered as short-term capital gains.

ITR Form: Since you are a teacher by profession, your income is likely from salary and other sources. If you do not have any business income, you would typically file your income tax return using ITR-1 (Sahaj) or ITR-2, depending on the complexity of your income sources.

ITR-1 (Sahaj): For individuals having income from salary, one house property, other sources (like interest income), and total income up to Rs. 50 lakh.
ITR-2: For individuals and Hindu Undivided Families (HUFs) not eligible to file ITR-1 and having income from salary, house property, capital gains, and more than one house property, etc.

Answered on Jul 22, 2023

Asked by Anonymous - Jul 21, 2023
Dear Chokshi JI I have sold a residential property in Feb.2023 and have capital gain of about 15.00 lakh. To construct new house, I have already bought residential plot costing 9.00 lakh and sale deed registered in May,2023. The cost of Plot was meet out from the sale proceed of the residential property sold in Feb.23. Kindly advise whether I have to kept Rs.6.00 lakh (i.e.Gain15.00 lakh minus 9.00 lakh cost of Plot) in Capital Gain Account Scheme for the construction of House OR I have to kept whole money of Capital Gain i.e. Rs.15.00 lakh in the CGAS. How much Amount I have to show in the IT Return for AY 2023-2024 ?
Ans: As per the provisions of the Income Tax Act in India, if you have made a capital gain from the sale of a residential property and wish to claim exemption under Section 54F by investing in a new residential property, the following rules apply:

- You can claim exemption on the capital gains if you invest the entire amount of capital gains in a new residential property. In your case, the total capital gain is Rs. 15.00 lakh, and you have utilized Rs. 9.00 lakh to purchase the residential plot. To claim the exemption, you must utilize the entire Rs. 15.00 lakh amount for the construction of the new house.

- If you are unable to invest the entire capital gains amount before the due date of filing your income tax return (usually July 31st of the assessment year), you can deposit the unutilized amount in a Capital Gain Account Scheme (CGAS) before the due date to claim the exemption. In your case, if you haven't utilized the entire Rs. 15.00 lakh for purchasing the residential plot and construction has not yet begun, you must deposit the unutilized amount of Rs. 6.00 lakh in the CGAS.

- In your Income Tax Return for AY 2023-2024, you need to show the capital gains from the sale of the residential property, which is Rs. 15.00 lakh, and then claim the exemption under Section 54F for the amount utilized to purchase the residential plot and construct the new house (i.e., Rs. 9.00 lakh). Additionally, you should mention that the remaining Rs. 6.00 lakh is deposited in the CGAS for the purpose of constructing the new house to claim the complete exemption.

Please note that to avail of the exemption under Section 54F, you need to fulfill all the conditions mentioned in the section, such as not owning more than one residential house (excluding the new one) on the date of transfer of the original property and not purchasing any other residential property within a specified time frame.

Answered on Jul 15, 2023

Hello! I would like to inform all of you that, I have 4 daughter and I am working in the development section and earning for survivals of my like and hardly able to manage my all daughters education fee. Presently my elder daughter is studying in Hamdard University, Delhi and she is perusing her B-Tech in IT. But i am facing a lot of problem to provide her semester fee, so I request all of you to kindly guide where I can able to get some educational fund donation.
Ans: I understand that you are facing financial difficulties in providing educational funds for your daughter's studies. It's commendable that you are seeking assistance to support her education. Here are some options you can explore to seek educational fund donations:

Scholarship Programs: Research and apply for scholarship programs specifically designed for students pursuing higher education. These programs often provide financial assistance to deserving students based on their academic performance, financial need, or other criteria.

Non-Profit Organizations: There are several non-profit organizations, foundations, and trusts that provide financial aid and scholarships to students in need. Look for organizations that support education and inquire about their scholarship or grant programs.

Corporate Sponsorships: Some companies offer scholarships or sponsorships for deserving students under the applicable CSR schemes applicable as per the present companies act. Research companies in your area or within your field of work and check if they have any educational support programs.

Government Schemes: Inquire about government-sponsored scholarship programs or educational grants available for students from economically weaker sections. Contact the relevant government departments or education authorities for information and assistance.

Crowdfunding Platforms: Consider utilizing crowdfunding platforms that allow individuals to create campaigns and raise funds for specific causes. You can create a campaign highlighting your daughter's educational aspirations and financial constraints, and share it with friends, family, and social networks to seek support.

Local Community Support: Reach out to community organizations, local charities, religious institutions, or social welfare groups in your area. They may have programs or funds dedicated to supporting students in need.

When seeking educational fund donations, it is important to present your case with honesty, transparency, and authenticity. Explain your situation and provide relevant documentation to support your request. Additionally, make sure to follow any guidelines or application procedures specified by the organizations or programs you approach.

Remember, it's always advisable to conduct thorough research, be cautious of potential scams, and verify the credibility of any organization or program before sharing personal or financial information.

I wish you the best of luck in finding the necessary support to help your daughter continue her education!

Answered on Jul 15, 2023

Hi Sir. What would be best investment for Senior Citizen less than 75 years age, with good tax savings option. Please suggest.
Ans: When considering investment options for senior citizens under the age of 75 with good tax savings options, there are a few options worth considering:

Senior Citizen Savings Scheme (SCSS): This government-backed scheme is specifically designed for senior citizens and offers attractive interest rates. Investments in SCSS are eligible for tax deductions under Section 80C of the Income Tax Act, up to a maximum limit of Rs. 1.5 lakh per financial year.

Pradhan Mantri Vaya Vandana Yojana (PMVVY): This scheme is offered by Life Insurance Corporation of India (LIC) and provides regular pension income to senior citizens. It offers a higher interest rate than other fixed-income instruments. PMVVY offers tax benefits on the pension received, and the investment amount is eligible for tax deductions under Section 80C.

Tax-saving Fixed Deposits (FDs): Many banks offer tax-saving FDs with a lock-in period of five years. The interest earned is taxable, but the investment amount is eligible for tax deductions under Section 80C.

National Savings Certificates (NSC): NSCs are issued by the Indian government and offer a fixed interest rate. The interest accrued is eligible for tax deductions under Section 80C. However, the interest earned is taxable.

Tax-saving Mutual Funds (ELSS): Equity Linked Saving Schemes (ELSS) are diversified mutual funds that invest primarily in equities. They offer the potential for higher returns over the long term. ELSS investments are eligible for tax deductions under Section 80C, up to a maximum limit of Rs. 1.5 lakh per financial year. However, please note that ELSS investments are subject to market risks.

It is important to consider your risk appetite, financial goals, and investment horizon before making any investment decisions. I would recommend consulting with a financial advisor who can assess your specific circumstances and provide personalized investment advice based on your needs.
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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.


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