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Anil Rego |388 Answers |Ask -Follow

Financial Planner - Answered on Feb 04, 2022

Anil Rego is the founder of Right Horizons, a financial and wealth management firm. He has 20 years of experience in the field of personal finance.
He’s an expert in income tax and wealth management.
He has completed his CFA/MBA from the ICFAI Business School.... more

Question by Vijay on Feb 04, 2022Hindi

I am filing my ITR using form 3, (having income from Profession – ‘Accounting and book keeping services' as per section 44AA, I don't have to maintain books of accounts. I have CFL - STCL and LTCL). As required, I have attached the PDF file for the query.

I have again used the Offline utility version: 1.0.17, and have only one point unresolved, which is not getting the correct offset of LTCG for current year, FY 2020-21 which is only Rs.27,539.00 (Current year STCL: 89.00 and LTCG is Rs.27628.00). This Capital gain falls under the category of Section 112A and the MF were acquired after January 2018. As per the provision of Income tax, there is an exemption up to Rs.1,00,000.00 is available, which is not being computed by the utility. Utility is offsetting this profit against CFL of earlier years instead of providing exemption in current year. Kindly guide how to proceed with this?

Ans: Try using the latest offline utility or file the returns in online mode.

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Question by Dip - Apr 04, 2022Hindi

I have brought forward LT capital loss (LTCL) amount which can be set-off against the current year's LT capital gain (LTCG) against sale of equities. The LTCL is in excess of my current year's LTCG. The income tax site is automatically setting off the full LTCG for the current year against my brought forward LTCL. However, LTCG to the extent of Rs 1 lac is in any case exempt from tax as per section 112A. So the automatic set off of the LTCL against the LTCG should be to the extent of the amount of LTCG in excess of Rs 1 lac. As this facility is not permitted by the current software (I have not been able to locate it), could you please advise me how to proceed in this regard.

Ans: Your issue is arising out of how the particular provision is worded. As per the provision, tax is payable on long-term capital gains “exceeding one lakh rupees” at the rate of ten per cent.

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Question by Devendra - Nov 07, 2022Hindi

Good Morning. I am a fan of yours and read you severally on Rediff replying queries of various Tax Problems. Sir, now I have a tax query and earnestly request you to resolve that which is as follows: My query is: I booked an under construction flat worth Rs.45.00 lacs which is scheduled to be ready for procession in year F.Y.2025-26. Now I sold shares worth Rs. 10,00,000/- and total amount paid to builder in F.Y.2022-23. Out of shares sold my LTCG IS Rs.700,000/-. Can I claim exemption for LTCG to that amount only which is given as advance in corresponding year? Again in F.Y. 2023-24 I will pay Rs.20,00,000/- by selling shares and LTCG of Rs.10,00,000/-. Can I claim Exemption for LTCG? Same process will happen in next 2 F.Ys. till procession of my new Flat. Can I claim exemption on LTCG on sale of shares in each financial year? Please also guide to fill ITR also for claiming above exemption in parts.

Ans: In respect of capital gains you can claim exemption from long term capital gains if the net sale consideration is invested in booking an under construction house. You get an extended period of three years to get possession in case it is booked with a developer.

In case the sale consideration is not fully invested in the residential house before filing of the Income Tax Return, the unutilised money has to be deposited with a bank under Capital Gains Account Scheme. The money deposited can be utilised within the prescribed period for payment of house.

You have to keep in mind that to claim this exemption, you should not own more than one residential house property on the date of sale of the shares except the one in respect of which you are claiming the exemption.

So once you claim exemption in FY 22 23, it is not advisable to claim exemption against gain earned in subsequent years.

In Income Tax Return, you can show the amount invested in property as exemption u/s 54F and if the entire 10 lakh consideration can not be invested in property then open CG account and show amount in ITR accordingly.

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