Personal Finance

Your Taxes

Sanjiv Chaudhary | Updated on September 02, 2018 Published on September 02, 2018

In the ITR for FY15-16 and FY16-17, I didn’t include my home-loan interest and principal repayments for deduction. So I paid excess tax for those years. Can I can claim a refund?

Kannan Raja

As per the provisions of Section 139(5) of Income Tax Act, if a person discovers any omission or any wrong statement in his/her return of already filed income, a revised return can be filed for at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.

However, the above is as per the amendment made by the Finance Act, 2017 (effective for FY17-18 and onwards). Prior to the said amendment, a revised return could be filed at any time before expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.

Thus, a revised return for FY15-16 (AY16-17) could be filed only till March 31, 2018, and a revised return for FY16-17 (AY17-18) can be filed till March 31, 2019. Accordingly, you are currently eligible to file a revised tax return only for FY16-17 and claim the required exemptions and deductions. For FY15-16, as the due date to file the tax return has expired, the required exemptions or deductions cannot be claimed. You may consider filing an application with the CBDT u/s 119(2)(b) of the I-T Act, wherein the CBDT — if it considers it desirable or expedient to do so to avoid genuine hardship — may authorise any I-T authority to admit such claim on merits.

I am a retired person with two daughters. I want to transfer ₹5 lakh each for long-term (5-10 years) investment in shares, in my daughters’ names. What are the tax implications? Does this transfer require any documentary evidence?

Satyanarayan

We understand that you would like to buy shares of ₹5 lakh each for your two daughters in their individual names. As per the provisions of Section 56(2)(x) of the I-T Act, any property (which includes shares and securities) received by an individual, without consideration, the fair market value of which exceeds ₹50,000 the whole of such fair market value, should be considered ‘Income from Other Sources’ in the hands of the receiver (i.e., your daughters).

However, these provisions do not apply in case of property received from a relative (definition of ‘relative’ includes father). Thus, in light of these provisions, there will be no tax implications in the hands of your daughters at the time of transfer of the investment in their name.

However, subsequently, when your daughters would sell such shares, they would be liable to capital gains tax as per the applicable provisions of the I-T Act.

Regarding your query on documentation, it is advisable to execute a gift deed while making the investment in your daughters’ names as this will serve as an evidence of the source of investment in their hands.

The writer is a practising chartered accountant. Send your queries to taxtalk@thehindu.co.in

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