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Mihir

Mihir Tanna  |964 Answers  |Ask -

Tax Expert - Answered on Feb 17, 2024

Mihir Ashok Tanna, who works with a well-known chartered accountancy firm in Mumbai, has more than 15 years of experience in direct taxation.
He handles various kinds of matters related to direct tax such as PAN/ TAN application; compliance including ITR, TDS return filing; issuance/ filing of statutory forms like Form 15CB, Form 61A, etc; application u/s 10(46); application for condonation of delay; application for lower/ nil TDS certificate; transfer pricing and study report; advisory/ opinion on direct tax matters; handling various income-tax notices; compounding application on show cause for TDS default; verification of books for TDS/ TCS/ equalisation levy compliance; application for pending income-tax demand and refund; charitable trust taxation and compliance; income-tax scrutiny and CIT(A) for all types of taxpayers including individuals, firms, LLPs, corporates, trusts, non-resident individuals and companies.
He regularly represents clients before the income tax authorities including the commissioner of income tax (appeal).... more
VIVEK Question by VIVEK on Dec 26, 2023Hindi
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For a 60+ person,advance income tax is not required to be paid.When such person need to pay the income tax ie before 31st March or in July at the time of filing the income tax return.

Ans: A resident senior citizen (i.e. an individual of the age 60 years or above) not having any income from business or profession is not liable to pay advance tax. However, before filing Income tax return, person is required to discharge tax liability, if any.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |7101 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 29, 2024

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Dear Tanna Ji, Sir , i am Neeraj Gupta. My query is related to Advance Tax. I am salaried Person and have no business, I filed my ITR on my own. Apart from from Salary, income from other sources are (1) I get Interest on saving bank Account, (2)There are Kishan Vikas Patra which was purchased by my younger Brother in 2018 But he expired in 2020. I am the the nominee in these Vikas Patra. Interest is componded annualy on KVP. After my Brother expired, I report accrual interest in my ITR. (3) I do have mutual funds on which I do book Profit whenever I feel. Now , I want to Know what are my obligations for Advance Tax ? I can not estimate the time and the income from Mutual Funds for calcualtion of advance tax. Interest on KVP is compounded annualy. If I pay taxes as advance tax before March 15,2023, Income tax portal calculate the interest under sec. 234, I received a demand notice which is calculated under section 234( C) on August 27,2023 for AY 2023-24. I learnt that If I deposit Tax as a advance Tax, Income tax software calculate interest. My understanding is that how can I pay Advance tax on the profit booked on mutual funds where I do not know the time and amount ? How can I pay advance tax on saving bank account where I do not know the amount of total interest ? Thirdly when interest on KVP is compounded annualy why can not I pay the tax in March only. I contacted / written to Income tax deptt. for the demand note of AY 2023-24 but in vain. No concrete reply these guy are able to give. If I pay tax during June July then Interest under 234 ( A,B,C) is applied. I am waiting for your reply. I am in 30% bracket as per OLD Regime.
Ans: Hi Neeraj,

I understand your confusion about advance tax and how it applies to your income sources. Let's break it down for each source and see how you can navigate it effectively.

Interest on Savings Account:

You're right; predicting the exact interest earned on your savings account can be tricky.
But here's a good strategy: Estimate the total interest you earned in the previous year and pay advance tax based on that.
This might lead to a slight mismatch, but it's better than facing a demand notice later.
Kisan Vikas Patra (KVP):

The compounded interest on KVP does add a layer of complexity.
However, you can still estimate the annual interest based on the KVP maturity value and the interest rate.
Pay advance tax considering this estimated interest. Remember, it's better to overestimate than underestimate to avoid interest charges under Section 234C.
Mutual Funds:

This is where it gets a bit trickier. Since you book profits at unpredictable times, estimating advance tax solely on mutual funds can be challenging.
Two options can help:
Consider Past Performance: Look at your past year's mutual fund gains and pay a conservative advance tax based on that.
Staggered Payments: Pay advance tax in installments throughout the year. This way, even if you book a large profit later, you've already paid some tax towards it, reducing your final tax liability.
Additional Tips:

A Certified Financial Planner (CFP) can help you with more personalized tax planning strategies. They can analyze your income sources, investment plans, and tax bracket to suggest an optimal advance tax payment plan.
The Income Tax Department website has an advance tax calculator that can be a helpful tool for estimation.
About the Demand Notice:

It's understandable that you're frustrated with the lack of clarity from the Income Tax Department.
You can try contacting their grievance cell or visiting their office for a more detailed explanation of the demand notice.

If you receive a demand notice for advance tax, it's essential to respond promptly and seek clarification from the Income Tax Department if needed. Explaining your situation and providing supporting documents can help resolve any discrepancies.

Remember:

Paying advance tax helps you avoid interest charges and penalties under Section 234A and 234C.
Even if your estimates aren't perfect, it's better to pay some advance tax than none at all.
Moving Forward:

By understanding how advance tax applies to your income sources and using the strategies mentioned above, you can ensure a smoother tax filing experience in the future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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T S Khurana

T S Khurana   |197 Answers  |Ask -

Tax Expert - Answered on Nov 23, 2024

Asked by Anonymous - May 11, 2024Hindi
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Can you please suggest on capital gains as per Indian taxation laws arising in the below two queries : 1) property purchased with joint ownership, me and my wife’s name in 2015 at a cost of 64,80,000, housing improvements done for the cost of 1000000 and brokerages of 200000 paid and sold the same property at 10000000 in Dec 2023? 2) 87% of the proceeds got from the deal i.e 8700000, have been reinvested to pay 25% amount in purchasing another joint ownership property in Dec 2023, 3) I have invested in another under construction property in Nov 2023 by taking housing loan, which is on me and my wife’s name worth 1.4 cr, here the primary applicant is me only while wife is just made a Co applicant in the builder buyer agreement and also on the housing loan . So what are the LTCG tax liabilities arising from the above 3 scenarios for FY 2023-2024 and FY 2024-2025. I intend to sale off the property acquired in (2) by Dec 2024 and use that proceeds to close the housing loan for the property acquired in (3), will this sale of property be inviting any tax liabilities if the complete proceeds received from the sale of the property in (2) would be utilised to close the housing loan taken in Nov 2023 for the property in (3) ? Since in FY 23-24, I would be claiming the LTCG from the sale proceeds of 1) invested in the purchase of property in 2), and I intend to sale off this property in Dec 2024, will the LTCG claim be forfeited on the property sale in (1), should I hold this property at least for further 1 year so that sale of this property in 2) will not invite STCG?
Ans: (A). Let's first talk about F/Y 2023-24 :
You jointly sold a Property during the year for Rs.76.80 lakhs (64.80+10.00+2.00), & sold the same for Rs.100.00 lakhs.
You have jointly also purchased Property No.3 (I suppose it is Residential only), for Rs.140.00 lakhs.
You should avail exemption u/s-54 & file your ITR accordingly. Please disclose all details about sale & purchase in your ITR.
02. Now coming to the F/Y 2024-25 :
You intend to Sell Property No.2, which was acquired in 2023-24. Any Gain on Sale of it would be Short Term capital Gains & taxed accordingly.
Alternatively, you may hold this sale of property no.2 (for 2 years from its purchase) & avoid STCG
You are free to utilize the sale proceeds in a way you like, including paying off your housing Loan.
Please note to avail exemption u/s 54 only from investment in property no.3 & not 2.
Most welcome for any further clarifications. Thanks.

...Read more

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