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Editorial Team

Applicable ITR Forms

Q1. Which form should I fill up to file my income-tax return for the

assessment year 2018-19?

Individual and HUF Nature of income ITR 1*

(Sahaj) ITR 2 ITR 3 ITR 4

Income from salary/pension (for ordinarily resident person)

✓ ✓ ✓ ✓

Income from salary/pension (for not ordinarily resident and non-resident person)

✓ ✓ ✓

Income or loss from one house property (excluding brought forward and carried forward losses)

✓ ✓ ✓ ✓

Income or loss from more than one house property

✓ ✓

Agricultural income exceeding Rs. 5,000 ✓ ✓

Total income exceeding Rs. 50 lakhs ✓ ✓ ✓

Dividend income exceeding Rs. 10 lakhs taxable under Section 115BBDA

✓ ✓

Unexplained credit or unexplained investment taxable at 60% under Sections 68, 69, 69A, etc.

✓ ✓

Income from other sources (other than winnings from lotteries and race horses or losses under this head)

✓ ✓ ✓ ✓

Income from other sources (including winnings from lotteries and race horses or losses under this head)

✓ ✓ ✓

Capital gains/loss on sale of investments/property

✓ ✓

Interest, salary, bonus, commission or share of profit received by a partner from a partnership firm.

✓

Income from business or profession ✓

Income from presumptive business ✓

Income from foreign sources or Foreign assets or having Signing authority in any account outside India

✓ ✓

Income to be apportioned in accordance with Section 5A

✓ ✓ ✓

Claiming relief of tax under sections 90, 90A or 91

✓ ✓

* Only an Individual, who is an ordinarily resident in India, can file income-tax return in Form ITR-1.

Other Assessees Status of Assessee ITR 4 ITR 5 ITR 6 ITR 7

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Firm (excluding LLPs) opting for presumptive taxation scheme

✓

Firm (including LLPs) ✓

Association of Persons (AOPs) ✓

Body of Individuals (BOIs) ✓

Local Authority ✓

Artificial Juridical Person ✓

Companies other than companies claiming exemption under Sec. 11

✓

Persons including companies required to

furnish return under:

A. Section 139(4A);

B. Section 139(4B);

C. Section 139(4C);

D. Section 139(4D);

E. Section 139(4E); and

F. Section 139(4F)

✓

ITR-1 (Sahaj)

Who can file return in

ITR 1?

Return in ITR 1 can be filed by an individual (not

HUF), if his total income includes:

1. Salary or pension 2. Income from 1 house property

(provided there is no brought forward loss or loss to be carried forward)

3. Income from other sources (other than income from lottery, race horses, dividend income in excess of Rs. 10 lakhs or unexplained Income, etc., as referred to in section 115BBE).

If income of another person (spouse, minor child,

etc.) is to be clubbed with the income of taxpayer,

return in ITR-1 can be filed only when such income

falls in any of the above categories.

Who can't file return in

ITR 1?

Return in ITR 1 cannot be filed by an individual:

1. Who is Non-resident or Not Ordinarily Resident

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2. Whose total income exceeds Rs. 50 lakhs

3. Who has income from more than 1 House Property or if there is brought forward loss or loss to be carried forward

4. Who has any of the following income: (a) Income from lottery or race horses (b) Dividend income exceeding Rs. 10

lakhs (c) Capital Gains (d) Unexplained income, etc., as referred

to in Section 115BBE (e) Agriculture Income of more than Rs.

5,000 (f) Income from Business or Profession. (g) Income from any source outside India (h) Loss under the head Income from

other sources 5. Who wants to claim relief under

Section 90 or 91 6. Who has any assets (including

Financial Interest in an entity) located outside India.

7. Who has any income to be apportioned in accordance with provisions of Section 5A

ITR-2

Who can file return in

ITR 2?

Return in ITR 2 can be filed by an individual and

HUF if his/its total income includes:

1. Salary or pension 2. Income from 1 or more house

properties (including losses) 3. Income from capital gains 4. Income from other sources (including

income from lottery or horse races or losses under this head)

If income of another person (spouse, minor child,

etc.) is to be clubbed with the income of taxpayer,

return in ITR-2 can be filed only when such income

falls in any of the above categories.

Who can't file return in ITR 2?

Return in ITR 2 cannot be filed by an individual and HUF if he/it has income chargeable to tax under the head 'Profit or gains from business or profession'

ITR-3 Who can file return in ITR 3

Return in ITR 3 can be filed by an Individual or HUF who has income from business or profession

Who can't file return in ITR 3?

Return in ITR 3 cannot be filed by any person other than an individual or a HUF. Further, return can be filed in ITR-3 if individual or HUF has no income

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from business or profession. ITR-4 (Sugam)

Who can file return in

ITR 4 (Sugam)?

Return in ITR 4 (Sugam) can be filed by an

individual or HUF or a Firm (other than a LLP) if

his/its total income includes:

1. Presumptive Income computed as per provisions of Sections 44AD, 44ADA and 44AE

2. Salary or pension 3. Income from 1 house property

(provided there is no brought forward loss or loss to be carried forward)

4. Income from other sources (other than income from lottery, race horses, dividend income in excess of Rs. 10 lakhs or unexplained Income, etc., as referred to in section 115BBE).

If income of another person (spouse, minor child,

etc.) is to be clubbed with the income of taxpayer,

return in ITR-4 can be filed only when such income

falls in any of the above categories.

Who can't file return in

ITR 4Sugam?

Return in ITR 4 (Sugam) cannot be filed by an

Individual/HUF/Firm if:

1. Total income of assessee including: (a) Income from more than 1 house

property or if there is brought forward loss or loss to be carried forward.

(b) Income from lottery or race horses (c) Dividend income exceeding Rs. 10

lakhs (d) Capital Gains (e) Unexplained income, etc., as referred

to in Section 115BBE (f) Agriculture Income of more than Rs.

5,000 (g) Income from Business or Profession. (h) Income from any source outside India (i) Loss under the head Income from

other source (j) Income from speculative business and

other special incomes. (k) Income from agency business or

commission or brokerage (l) Income from any source outside India. 2. If relief under Section 90, 90A or 91 is

to be claimed. 3. If taxpayer has any assets (including

financial interest in any entity) located outside India or has signing authority

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in an account located outside India. 4. If taxpayer is eligible for presumptive

taxation of Section 44AD or Section 44AE, or Section 44ADA but he does not opt for presumptive taxation, then he require to maintain Accounts and get those audited.

Q2. I have some unexplained income. Whether I can choose ITR-1 to

file my income-tax return?

Taxpayers having unexplained income cannot opt for ITR-1 Sahaj. You will have to

file ITR-2 or ITR-3 or ITR-4 on basis of criteria given in FAQ No. 1.

Q3. I have received dividend income of Rs. 15 lakhs from an Indian

Company. Whether I can choose ITR-1 to file my income tax return?

Taxpayers who have received dividend income above Rs. 10 lakhs during the

relevant previous year cannot opt for ITR-1 Sahaj. You will have to file ITR-2 or

ITR-3 or ITR-4 on basis of criteria given in FAQ No. 1.

Q4. Whether all taxpayers who are earning income only from salary

can choose ITR-1 for filing income-tax returns?

Yes, all taxpayers who are earning income only from salary can choose ITR-1 for

filing tax returns. However, salaried taxpayers cannot choose ITR-1 in following

cases:

(a) His salary income exceeds Rs. 50 lakhs (b) His salary income is earned from outside India (c) He is Non-resident or Not-Ordinarily Resident in India (d) He has any assets located outside India

He has signing authority in any account located outside India.

Q5. Whether individuals are required to mention details of assets and

liabilities in ITR 1 Sahaj?

Individuals/HUFs are required to furnish details of assets and liabilities only when

their income exceeds Rs. 50 lakhs. The Schedule AL wherein the details of assets

and liabilities are to be furnished is available only in ITR-2, ITR-3 and ITR-4.

Thus, the individual or HUF who has to report the details of assets and liabilities

has to opt for filing of return in ITR 2, ITR 3 or ITR 4 on basis of criteria given in

FAQ No. 1.

Q6. My income is Rs 60 lakhs. What type of details of assets and

liabilities I need to mention in income-tax return?

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During 2016, the Govt. had introduced new Schedule AL in income-tax returns

requiring individuals/HUFs to declare the value of assets and liabilities if their

total income exceeds Rs. 50 lakhs. If taxpayer is required to provide information in

this Schedule, he shall provide the details of cost of immovable property, jewellery,

vehicles, shares, bank and cash balance, etc. Further, taxpayer is also required to

disclose address of immovable property and description of movable assets.

Filing of Returns

Q7. How to create account on the website of E-filing portal of

Income-tax Dept.?

Click on the following link and fill all the required information to create an account

on e-filing portal:

https://portal.incometaxindiaefiling.gov.in/e-

Filing/Registration/RegistrationHome.html?lang=eng

Q8. I have forgotten the login details of

https://incometaxindiaefiling.gov.in. How can I get a new password

from the Income-tax Department?

1. Click on 'Forget Password' or on the following link https://portal.incometaxindiaefiling.gov.in/e- Filing/ResetPassword/UserIDCapturePage.html

2. Enter your user ID (i.e., your PAN) and the Captcha (i.e., the security random code) and click on continue (visually challenged users can use OTP option instead of entering Captcha code)

3. In the password reset page, one of the following options can beselected:

(a) Answer the secret question; or (b) Upload the digital signature certificate; or (c) Using OTP ; or (d) Using Aadhaar OTP (e) Login through your net-banking account. 4. Enter new password twice and click on 'Reset Password' to generate

new password; 5. If you are unable to retrieve your password, send an email request

from registered email-id to validate@incometaxindia.gov.in with following details:

(a) PAN: (b) Name of the assessee appearing on the PAN card; (c) Date of Birth/Date of incorporation; (d) Name of father appearing on the PAN card; (e) Registered PAN Address;

New password will be communicated to you by the income-tax department via email.

Q9. How can I login at https://incometaxindiaefiling.gov.in through

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Net Banking facility?

E-filing portal of Income tax department has provided a new facility for login.

Taxpayer can now use the Net Banking facility to login at e-Filing Portal. This

option is provided at the bottom of login page.

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When user uses the net banking facility to log-in, he shall get an OTP (one time

password) on his registered mobile number, which can be used to log-in. User shall

not be required to enter the password (created at e-filing website) and the Captcha

code. This facility shall be useful for the users who have forgotten their passwords

and are unable to reset it.

Q10. What are the modes of filing return of income?

Return of income can be filed in paper mode or in e-filing mode. If return of

income is filed through electronic mode, then the assessee has following three

options:

1. E-filing using a Digital Signature (DSC) 2. E-filing without a Digital Signature 3. E-filing under Electronic Verification Code (EVC)

If return of income is filed using a DSC or under EVC, then there is no requirement

of sending the signed copy, ITR V (i.e., acknowledgement of return filed

electronically) to Bangalore CPC. However, if the return is filed without using DSC

or without EVC, the assessee shall send the signed copy of ITR V on the following

address within 120 days of uploading the return either by ordinary post or by speed

post only:

Income Tax Department - CPC, Post Bag No.-1, Electronic City Post Office,

Bangalore -560100, Karnataka

Q11. Who are required to file return of income electronically?

The general rule is that electronic filing of return of income is mandatory for all

assessees. However, a person can furnish the return of income in paper form in

ITR 1 or ITR 4 in any of the following circumstance:

1. Taxpayer is an individual and his age is 80 years or more during the previous year

2. Taxpayer is an Individual, HUF or Partnership Firm and his/its income during the previous year does not exceed Rs. 5 lakhs and no refund is claimed in the return of income.

Q12. When is it mandatory to file return of income?

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It is mandatory for a company and a firm to file its return on income. However, for

an individual, HUF, AOP or BOI it is mandatory to file return of income if his/its

gross total income (without giving effect to provisions of section 10(38) or section

10A or section 10B or section 10BA or Chapter VI-A deduction) exceeds the

maximum exemption limit.

Q13. Is it mandatory to file return of income if I have a PAN?

No, it is not mandatory to file return of income if your income is less than

maximum exemption limit, irrespective of the fact that you have been allotted a

PAN.

Q14. I am an Individual and resident of India. Do I need to file return if

my income is below taxable limit but am having an account in a foreign

bank?

Yes, it is mandatory for you to file the income-tax return. In view of newly inserted

proviso to section 139(1), it is mandatory to file income-tax return, if following

conditions are satisfied:

1. The assessee is resident and ordinarily resident in India 2. He has signing authority in any account or any asset or any

financial interest in any entity located abroad.

The assessee is required to provide requisite details of such account, assets or

financial interest in the return of income.

Q15. Is there any restriction on number of returns that can be filed

using same email-ID or same mobile number?

Only 10 returns can be filed using same email-id or same mobile number. This is to

ensure that family members and related business concerns (not exceeding 10

separate users) not having personal email or mobile number can be covered under

a common email or mobile number, but it is advisable that taxpayers should have

their own unique email ID and Mobile number registered with the Department.

Q16. What are the due dates for filing of income-tax returns for the

year ending March 31, 2018?

Particular of assessee Due Date Company (Private, Public or Foreign Co.) September 30, 2018Any assessee who is required to furnish TP Report in Form No. 3CEB

November 30, 2018

Any assessee whose accounts are required to be audited September 30, 2018Co-operative Society September 30, 2018Other Cases July 31, 2018

Q17. If the last date to file income-tax return is a public holiday,

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whether the next day would be treated as "last date of filing"?

Normally, income-tax department continues its operation during the last days of

filing of income-tax return even if the last day eventually falls on Sundays or on

holidays. However, if department is closed on the last due date, then the

immediately next working day of the department would be considered as the last

date of filing of income-tax return.

Since most of the taxpayers are required to file return of income electronically, it

would be not be relevant for them if Dept. is not working on the last day of the

Financial Year which happens to be a public holiday.

Q18. I am 30 years old salaried person and my income for Assessment

Year 2018-19 is Rs. 6,00,000. Whether I can file return of my income

in paper mode, i.e., physically?

It is mandatory to file return of income electronically when income exceeds Rs. 5

Lakhs during the previous year 2017-18. As your income is above Rs. 5 lakhs you

cannot file return of income in paper mode.

Q19. My total income is Rs. 4 lakhs and I want to claim income-tax

refund. Whether I can file my return of income in paper mode?

No, you cannot file return of income in paper mode as e-filing of return is

mandatory for claiming any income-tax refund.

Q20. I am 82 years old and my income is Rs. 8,00,000. Do I need to file

return of income electronically?

It's up to you. You have an option to file return of income electronically or in paper

mode as super senior citizens (i.e., individuals aged 80 years or more) are exempt

from filing return of income in electronic mode.

Q21. I am 85 years old and want to claim income-tax refund. Do I need

to file return of income electronically?

Super senior citizens are exempted from filing return of income in electronic mode

even for claiming tax refunds. Thus, you can file your return of income either

electronically or in paper mode.

Q22. I am 65 years old senior citizen and my total income is Rs.

6,50,000. Can I file my return of income in paper mode?

You are required to file your return of income electronically as your income

exceeds Rs 5,00,000. An option has been given to file return of income in paper

mode only to the resident individuals whose age is 80 years or more.

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Q23. How to file return electronically?

Income-tax return can be filed electronically with the help of following

instructions:

1. Visit https://incometaxindiaefiling.gov.in; 2. Choose the applicable ITR form (Refer to FAQ No. 1) and download

excel utility or java utility. Assessees, who are required to file ITR-1 or ITR-4, may also file the return directly from e-filing portal without downloading the Excel or Java utility.

3. Prepare the ITR in Excel utility or Java utility and generate XML file. 4. If you don't have an account on the website of

incometaxindiaefiling.gov.in, you need to create the account first from the following link:

https://portal.incometaxindiaefiling.gov.in/e- Filing/Registration/RegistrationHome.html?lang=eng

5. After creation of account, you need to login in and then click on link of 'Filing of Income Tax Return' given on the Dashboard.

6. Select the 'Assessment Year', and 'Form Name' and Submission Mode.

7. Select 'Upload XML' under submission mode and then click on the option to verify Income-tax return. If you don't want to verify return later on then just select 'I don't want to verify this Income Tax Return………' and click on continue to upload generated XML file.

8. Click on Choose file to select the generated XML file and Submit it 9. On successful submission of ITR form, a pop-up menu will be

displayed on the screen to e-verify uploaded return.

Q24. Can I file return of income even if my income is below taxable

limits?

Yes, you can file return of income voluntarily even if your income is less than the

maximum exemption limit.

Q25. What documents are to be enclosed along with the return of

income?

Income-tax returns are annexure less. Hence, there is no need to enclose any

document(s) along with the return of income. Thus, documents like TDS

certificate, balance sheet, Profit & Loss A/c, Capital A/c, proof of investments, etc.,

are not to be attached along with the return of income. However, these documents

should be retained and may have to be produced before the Assessing Officer

whenever he requires you to do so.

Q26. The Finance Act 2016 and Finance Act 2017 has revised the

provisions relating to filing of revised and belated returns. What are

the applicable provisions for ITR filing relating to A.Y. 2017-18 and

A.Y. 2018-19?

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Section 139 of the Income-tax Act deals with the provisions relating to filing of ITR.

The Finance Acts 2016 and 2017 had substantially amended the provision relating

to revised and belated return. The limitation period for filing of belated return and

revision of return have been explained below:

Assessment Year

Due dates for filing of Original Return Belated

Return Revised Return

2017-18 31-07-2017 31-03-2018 31-03-2019 2018-19 31-07-2018 31-03-2019 31-03-2019

Refer FAQ16, for due dates applicable in case of Corporate taxpayers and other assessees.

Q27. I e-filed my return and identified 'mistake apparent from record'.

Can I rectify it with CPC in paper form?

No, the CPC doesn't accept any manual correspondence. You have two options to

rectify this mistake. You can either file revised return or file rectification request

via incometaxindiaefiling.gov.in.

Aadhaar-PAN linking

Q28. How to link Aadhaar with PAN?

If your Aadhaar number isn't yet linked with PAN then every time you login on

e-filing portal you, you shall be shown a popup message asking you to link Aadhaar

with PAN. Use the link given in the pop-up window to link the Aadhaar with PAN.

Alternatively, you can also follow the below steps to link Aadhaar with PAN:

1. Login to e-filing portal https://www.incometaxindiaefiling.gov.in 2. Go to 'Profile Settings' and click on 'Link Aadhaar' 3. Enter your 'Aadhaar number', 'Name as per Aadhaar' and click on

'Link Aadhaar'. In case you Aadhaar Card is carrying just year of birth then you have to check on the option on 'I have only year of birth in Aadhaar Card'

4. You are also required to give consent to validate Aadhaar details with UIDAI in order to complete process of linking.

5. If the details as per PAN and Aadhaar are same, the linking shall be done automatically.

Q29. What are the different modes to link Aadhaar with PAN?

It is mandatory to link Aadhaar number with PAN to file income tax return.

Government has prescribed following modes to link Aadhaar number with PAN:

(a) SMS: Send SMS to 567678 or 56161 from your registered mobile number

in the following format:

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UIDPAN <SPACE> <12 Digit Aadhaar Number><SPACE><10 Digit PAN>

For E.g., UIDPAN 123456789000 EPOPE1234E (b) Online:

- By visiting the website of the PAN Service providers (i.e., www.tin-nsdl.com or www.utiitsl.com). Click on the button 'Link Aadhaar to PAN' which will direct you to the income-tax website.

- By visiting directly the e-filing website (i.e., www.incometaxindiaefiling.gov.in).

(c) Paper mode: File one page Form along with minimal fee with the designated PAN centre. Copies of PAN card, Aadhaar card are to be furnished.

Q30. How can I link my Aadhaar number with PAN if there is minor

mismatch in my name appearing in Aadhaar and PAN?

Earlier, Income-tax Dept. was allowing linking of Aadhaar Number with PAN if

there was minor mismatch in the name appearing in PAN compared to the name

appearing in Aadhaar Card. Identity of taxpayers were verified by sending One

Time Password (OTP) to mobile number registered with UIDAI.

However, with effect from 01-12-2017 UIDAI has discontinued the practice of

verifying the user's identity with OTP. Therefore, Aadhaar number cannot be

linked with PAN if there is any mismatch in the name entry in the records of

Aadhaar and PAN. Taxpayers are required to rectify either of the documents, PAN

or Aadhaar, so as to complete the process of linking these two records.

Q31. Why am I not able to link my Aadhaar with PAN, though my name

as per Aadhaar and PAN is same?

There are certain reasons due to which a taxpayer might not be able to link his

Aadhaar number with his PAN. Some of the reasons are:

(a) Phone number of taxpayer is not updated in Aadhaar database: Taxpayers cannot link their Aadhaar number with PAN if their phone number is not updated in the Aadhaar database. In this case taxpayers are required to visit the Aadhaar Facilitating Center to update their phone number in Aadhaar database.

(b) Gender Mismatch: In case of gender mismatch, taxpayers won't be able to link Aadhaar with PAN. In this case, taxpayers are required to change the gender either in Aadhaar database or in PAN database.

(c) Date of birth: Aadhaar won't be linked to PAN in case there is mismatch in date of birth of the taxpayer. However, taxpayers whose Aadhaar Card contains only the Year of Birth and it matches with the PAN records, linking of these two documents would not be difficult.

Q32. Whether my PAN will be treated as invalid if I do not link my

Aadhaar number with PAN?

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As per proviso to Sec 139AA(2), in case assessee fails to intimate the Aadhaar

Number, the PAN allotted to the person shall be treated as invalid and the other

provisions of this Act shall apply, as if the person had not been allotted PAN.

However, in case of Binoy Viswam v. Union of India [2017] 82 taxmann.com 211

the Supreme Court has partially stayed the operation of Proviso to Section

139AA(2). It held that if the assessee does not hold the Aadhaar number then PAN

should not be considered invalid. However, if assessee is holding Aadhaar number

he must intimate it to the Department.

Your PAN will be treated as invalid if you do not link it with Aadhaar number as the

Apex Court has given relief in those cases where taxpayers did not possess Aadhaar

number.

Q33. I do not have Aadhaar number. Whether my PAN will be treated

as invalid if I do not link my PAN with Aadhaar number?

As per proviso to Sec 139AA(2), in case assessee fails to intimate the Aadhaar

Number, the PAN allotted to the person shall be treated as invalid and the other

provisions of this Act shall apply, as if the person had not been allotted PAN.

In the case of Binoy Viswam v. Union of India [2017] 82 taxmann.com 211, the

Supreme Court has partially stayed the operation of Proviso to Section 139AA(2).

It held that if the assessee does not have the Aadhaar number then PAN should not

be considered as invalid.

Your PAN will not be treated as invalid if you do not link it with Aadhaar number

as you do not possess Aadhaar number.

Q34. What is the last date to link Aadhaar with PAN?

As per provisions of Section 139AA(2) every person who has been allotted PAN as

on July 1, 2017, who is eligible to obtain Aadhaar, shall intimate his Aadhaar

number to the department on or before a date to be notified by the Govt. The Govt.

has notified June 30, 2018 as the last date for linking of Aadhaar with PAN.

Q35. I cannot get my Aadhaar number by the end of due date of filing

Income-tax Return. How can I file ITR without linking Aadhaar with

PAN?

E-filing website doesn't allow filing of ITR without linking Aadhaar number with

PAN. However, recently, the Kerala and Gujarat High Courts in the cases of

Prasanth Sugathan v. UOI [2017] 84 taxmann.com 73 (Kerala) and Bandish

Saurabh Soparkar v. UOI [2017] 87 taxmann.com 48 (Gujarat) respectively

allowed taxpayers to file their returns manually without furnishing the Aadhaar

number or enrollment ID of Aadhaar application form. The Courts held that

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taxpayers who do not have Aadhaar have to be allowed to file their returns before

department in hard copy for relevant year as an interim measure. However, it

would not be obligatory for department to process such returns and Dept. may

demand the Aadhaar number from the taxpayers while processing such returns.

Therefore, it is suggested that you should file the ITR manually by visiting

jurisdictional income-tax office by relying on the above judgement. A covering

letter should also be attached with the ITR mentioning that the taxpayer has opted

to file the return manually relying on the aforesaid High Court Cases. You are also

required to mention the reason why Aadhaar number couldn't be obtained before

the end of due date of filing of ITR.

However, you are required to link their Aadhaar number with PAN as and when

available so as to enable income-tax dept. to process their ITRs filed.

Presumptive Taxation

Q36. What is the rate of deemed profits in case of presumptive

taxation under Section 44AD?

As per the provisions of Section 44AD the rate of deemed profit would be 8% of

total turnover or gross receipts during the previous year 2017-18. However, the

rate of presumptive income would be 6% in case of digital receipts.

Q37. What is the rate of presumptive income under Section 44AD on

digital receipts?

The rate of presumptive income would be 6% of total turnover or gross receipts in

case of digital receipts.

Q38. I have received the sale proceeds of credit sales in the month of

July 2018. Whether I can declare presumptive income for credit sales

at 6% as such credit sales were made in the previous year 2017-18?

You can declare presumptive income at 6% for such credit sales while filing your

income tax return. The benefit of reduced rate of 6% will be available even if the

proceeds of credit sales are received after the previous year but before due date of

filing return under Section 139(1).

Q39. I have made cash sales as well as digital sales for the previous

year 2017-18. How can I determine the rate of presumptive profit

under Section 44AD?

As per the provisions of Section 44AD the rate of deemed profit would be 8% for

cash sales and would be 6% in case of digital receipts.

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Q40. Whether a firm can file ITR-4 Sugam for presumptive income?

Yes, firms can file ITR 4 for presumptive income.

Q41. I want to opt for presumptive tax scheme under Section 44AD. I

have income from more than one house property. Can I file return in

ITR-4?

No, you cannot file ITR-4S. Any person earning income from more than one house

property cannot file return in ITR 4. You can report your presumptive income in

ITR 3.

Q42. I want to opt for presumptive tax scheme under Section 44AD. I

have income from capital gains as well. Can I file return in ITR-4?

No, you cannot file ITR-4. Any person earning capital gains cannot file return in

ITR 4. You can report your presumptive income in ITR 3.

Capital Gains

Q43. I have earned profit from sale of listed shares which were kept

for more than 12 months. Whether it will be treated as capital gain or

business profit?

As per Circular No. 6, dated 29-2-2016 issued by CBDT, if the taxpayer desires to

treat profit on sale of listed shares as capital gain then the same cannot be disputed

by the AO subject to the condition that same treatment would be given in

subsequent years. If taxpayer wishes to treat the profit arising from sale of listed

equity shares as capital gain, it shall be exempt from tax under Section 10(38) if all

prescribed conditions are satisfied.

Q44. I have earned a profit of Rs. 2 lakhs from sale of long-term listed

equity shares in the month of June 2018. Is this gain exempt from tax?

Whether I have to report this gain in ITR form?

The Finance Act, 2018 introduces a new Section 112A and withdraws Section

10(38) exemption for the long-term capital gains arising from transfer of listed

securities, being equity shares, units of equity oriented funds or units of business

trusts.

As per section 112A, long-term capital gains arising from transfer of listed

securities, being equity share, units of an equity oriented fund or a units of a

business trust shall, be taxed at 10% in excess of Rs. 1 lakh.

However, this new Section 112A would be applicable from assessment year

2019-20 i.e., all transactions of sale of listed securities on or after April 1, 2018

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shall be reported in the next year ITR form applicable for A.Y. 2019-20. Thus, you

are not required to report gains that is taxable under section 112A while filing

income-tax return for current Assessment Year 2018-19.

Q45. I have earned a profit of Rs. 2 lakhs from sale of long-term listed

equity shares in the month of March 2018. Is this gain taxable under

Section 112A? Whether I have to report this gain in ITR form?

The Finance Act, 2018 has introduced a new Section 112A and withdrawn Section

10(38) exemption for the long-term capital gains arising from transfer of listed

securities, being equity shares, units of equity oriented funds or units of business

trusts.

The new Section 112A is applicable from assessment year 2019-20. Thus,

long-term capital gains earned in the month of March, 2018 shall be exempt from

tax under Section 10(38) provided prescribed conditions are satisfied. Such income

shall be reported in ITR 2 or ITR 3, as the case may be.

Q46. I have earned profit from intra-day trading. Is it taxable as

business profit or capital gain?

Intra-day trading is considered as speculation business and the income therefrom

would either be speculation gain or speculation loss. Income from speculation

gains is taxed at the normal rates. However, any losses arising from speculation

business are to be set off only against profit of any other speculative business.

Verification of Returns

Q47. What are the benefits of e-filing of return via EVC?

Taxpayer will get an option to e-verify the uploaded return by either entering

Electronic Verification Code (EVC) or an Aadhaar based One Time Password

(OTP).

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This facility of e-verification has been initiated by the income tax department in

order to reduce physical submission of signed copy of acknowledgement (i.e.,

ITR-V).

Q48. How to e-Verify Income tax return by generating EVC?

EVC can be generated via following options:

1. Through Net Banking (a) Click on option "I do not have a EVC and I would like to generate

EVC to e-verify my return" (b) Then click on "EVC- Through Net Banking and click on Continue.

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(c) Taxpayer will be logged out of e-filing portal and will be directed to a page where he can select the bank wherein he has Net Banking facility.

(d) Login to Net Banking website and search for option for login to e-Filing portal.

(e) Go to e-file menu and select E-Verify return. (f) Click on the e-Verify link against the return that has been

uploaded. 2. Bank Account Number

EVC can be generated by Pre-validating Bank Account Details. Taxpayer needs to validate his bank account number that is linked with his PAN.

3. Demat Account Number EVC can be generated by Pre-validating Demat Account Details.

Taxpayer needs to validate his Demat account number that is linked with his PAN.

Q49. How to generate Aadhaar based OTP to e-verify return?

Income tax return can be e-Verified by generating Aadhaar based one-time

password (OTP). Taxpayer will be required to link his Aadhaar Number with his

PAN to use this facility. Aadhaar based OTP can be generated by following steps:

1. Go to e-file menu, select e-Verify return. 2. Click on e-Verify link and select Option 3 – "I would like to

generate Aadhaar OTP to e-Verify my return" 3. Taxpayer will get OTP on mobile number. 4. Enter the OTP and click on "Submit Aadhaar OTP" button

Q50. I don't want to e-Verify my return. Can I send the signed copy of

acknowledgment?

E-verification of return is not mandatory. Taxpayer can get the printout of ITR

acknowledgement (i.e., ITR-V), get it signed and send it to "Income Tax

Department - CPC, Post Bag No - 1, Electronic City Post Office, Bangalore -

560100, Karnataka" within 120 days of uploading the return either by ordinary

post or by speed post only.

If ITR-V is not submitted within stipulated period of 120 days, then it will be

deemed that assessee has not filed the return of income.

If assessee is using digital signature ("DSC") for uploading the return, it is to be

registered on the website beforehand. If return is filed through DSC, assessee will

not be required to send the print-out of the acknowledgement to CPC.

Q51. Whether e-filing of return under electronic verification code will

do away the need of sending physical copies of ITRV to CPC,

Bengaluru?

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Now income-tax returns can be filed online via electronic verification code. Any

taxpayer who is filing return through this mode will no longer required to send the

singed copies of ITRV to CPC, Bengaluru.

Q52. I have filed my return electronically and furnished the signed

copy of acknowledgement to the CPC. However, I have received a letter

from CPC that said copy of acknowledgement had not been received.

Since time-limit to resend the acknowledgement has already expired,

whether it will be deemed that I have not filed the return?

The issue has been dealt with by the Bombay High Court in the case of Crawford

Bayley & Co. v. Union of India [2011] 16 taxmann.com 323 (Bom.), wherein the

Court, despite expiry of the time-limit to send the acknowledgement, allowed

additional time to assessee to resend the same, since the assessee had furnished

adequate material before the Court in support of its contention that having filed

return electronically, it had also submitted ITR-V Form by ordinary post.

Based on the above, if you have already submitted the ITR-V to the CPC then you

can resend the acknowledgement, even though the time-limit for filing ITR-V has

already expired, provided you have sufficient evidences to substantiate the fact that

you had sent the acknowledgement earlier within 120 days of uploading the return

either by ordinary post or by speed post only.

Alternatively, you can also e-verify the return by entering Electronic Verification

Code.

Q53. How to know whether my e-return has been processed at CPC

Bangalore?

Log on to e-filing website and click on 'view Returns/Forms'. Then select 'Income

Tax Returns' from the drop down option and click on submit to check the status of

return.

Q54. How can I find my jurisdictional Assessing Officer?

(a) Click on the following link https://portal.incometaxindiaefiling.gov.in/e- Filing/Services/KnowYourJurisdictionLink.html?lang=eng

(b) Enter your PAN, Mobile Number and click on submit (c) Enter the OTP received on the mobile number and validate it.

You will get the Jurisdiction details of the PAN.

Tax payment, TDS and refund

Q55. What are the maximum exemption limit and slab rates applicable

for Assessment Year 2018-19?

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The maximum exemption limit and the slab rates for Assessment Year 2018-19 are

given in the following table:

Class of persons Income Slab (Amount)

Tax rate

Resident senior citizen (age 60 years or more but less than 80 years)

Up to Rs. 3,00,000 Nil Rs. 3,00,000 to Rs. 5,00,000

5%

Rs. 5,00,000 to Rs. 10,00,000

20%

Above Rs. 10,00,000 30% Resident super senior citizen (age 80 years or more)

Up to Rs. 5,00,000 Nil Rs. 5,00,000 to Rs. 10,00,000

20%

Above Rs. 10,00,000 30% Any other individual or HUF (i.e., other than above)

Up to Rs. 2,50,000 Nil Rs. 2,50,000 to Rs. 5,00,000

5%

Rs. 5,00,000 to Rs. 10,00,000

20%

Above Rs. 10,00,000 30%

Q56. When do I need to pay education cess and surcharge?

Surcharge is levied at the rate of 10% on the amount of income-tax if net income

exceeds Rs. 50 lakhs but doesn't exceed Rs. 1 crore and at the rate of 15% on the

amount of income tax if net income exceeds Rs. 1 crore.

Education cess is an additional levy which is calculated on the aggregate of total tax

liability and surcharge levied there on. Cess is levied in two parts, Education Cess

at the rate of 2% and Secondary & Higher Education Cess at the rate of 1%. If

surcharge is not applicable then the cess shall be calculated on total tax liability.

Q57. Can I claim benefit of tax deducted in advance on income which is

taxable in subsequent years?

Certain provisions of TDS (including TCS) require deduction of tax at source at the

time of payment or at the time of credit, whichever occurs earlier. Advance

payments are also subjected to TDS. Old ITR form did not have any mechanism to

carry forward the excess TDS, thus, taxpayers were required to show the entire

TDS as a deduction and claim refund of excess TDS. To overcome the issues, the

Schedule of TDS/TCS in the ITR forms now provides columns to fill in the

information of tax deducted in previous years but credit for the same is claimed in

current year.

You cannot claim credit of TDS pertaining to income which is taxable in

subsequent year. Thus, such TDS credit can be carried forward to subsequent year

and can be claimed in the year in which income is offered to tax.

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Q58. I have filed my return of income electronically but in

refund/demand status it is mentioned as "refund not determined".

What does this status indicate?

This status depicts that your return is not processed. You will get status of

tax-refund after your return is processed by the income-tax department.

Q59. I have claimed tax refund by filing income-tax return but my

refund claim failed as I have mentioned incorrect account number.

How can I submit correct account number to claim tax refund?

You can submit your correct bank account number after selecting option of refund

reissue. Procedure to apply for refund reissue is outlined hereunder:

1. Login to https://incometaxindiaefiling.gov.in 2. Go to 'My Account' and select 'Service Request'. 3. Select Request Type as 'New Request' and then choose 'Refund

Reissue' under request category. 4. Update bank account details. 5. Click on submit.

Q60. I received advance salary (for the month of April, 2018) in the

month of March 2018. Whether the same will be taxable in A.Y

2018-19?

Salary is taxable on due or receipt basis, whichever is earlier. So it will be taxable in

the assessment year 2018-19. Once salary is included in income of assessment year

2018-19 on receipt basis it will not be included again on due basis in assessment

year 2019-20.

Q61. My employer did not deduct tax from my salary income. Whether

in such case I am liable to pay tax on my salary income?

TDS is only a mode of early collection of tax. The ultimate liability of paying taxes

is on the person earning income and, hence, if the employer fails to deduct tax,

then it is the liability of the employee to pay the tax on the same. Further, if the

employer has deducted less tax, then it is the liability of the employee to pay the

balance tax.

Q62. How to know TAN of my deductor?

It can be found either on Form 16/16A or in 26AS tax credit statement available on

https://www.tdscpc.gov.in/app/login.xhtml TRACES (TDS Reconciliation and

Correction Enabling System) website.

Q63. How best to proceed in case of TDS mismatch?

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Even if the credit for TDS as claimed in the return matches with the balance

appearing in the Form 26AS, Assessing Officer may raise a demand for payment of

differential amount due to TDS mismatch. The reasons for such difference could be

as under:

1. TAN of deductor was wrongly mentioned 2. Name of deductor was not spelt out correctly 3. Tax deducted by one deductor was wrongly included in the amount

of tax deducted by another deductor 4. In case of such TDS mismatch, an assessee can file a rectification

request in the following manner: (a) Login to your account in https://incometaxindiaefiling.gov.in (b) Go to e-File > Rectification request (c) You need to fill up the following details:

PAN Return to be rectified Assessment Year Latest Communication Reference Number issued under section

143(1)/154 (it starts with CPC/Assessment Year/) image

(d) Click on Validate to go to next step (e) On the next screen, choose 'Taxpayer is correcting data for Tax

Credit Mismatch Only' from the drop-down box of 'Rectification Request 'Type'

(f) Check from the following relevant boxes for which item rectification is sought for:

TDS on salary income details image

TDS on other than salary income details image

(g) Fill in all the relevant details, including details of tax deducted and reported in the return of income filed earlier

(h) Click on the button 'Submit' to submit the rectification request.

The TDS mismatch may also be due to error in TDS return filed by deductor. In

such a situation you should intimate the deductor about such error and tell him to

rectify the TDS return.

In Press Note No. 402/92/2006, dated April 17, 2014 CBDT had noted that many

taxpayers commit mistakes while furnishing details of tax credit in the return of

income. Such mistakes include:

1. Invalid/incorrect TAN of deductor; 2. Furnishing same TAN for more than one deductor; 3. Filing information in wrong TDS Schedules in the Return Form; 4. Furnishing wrong challan particulars in respect of Advance tax,

Self-assessment tax, etc.

Consequently, the tax credit could not be allowed to the taxpayers while processing

returns despite the tax credit being available in Form 26AS statement. The CBDT,

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therefore, has directed the taxpayers to verify if the demand raised on them is due

to tax credit mismatch on account of such incorrect particulars and submit

rectification requests with correct particulars of TDS/tax claims for correction of

these demands. The rectification requests have to be submitted to the

jurisdictional Assessing Officer in case the return was processed by such officer, or

the taxpayer is informed by CPC, Bangalore that such rectification is to be carried

out by Jurisdictional Assessing Officer. In all other cases of processing by CPC,

Bangalore, an online rectification request can be made (as defined above).

Q64. I am a salaried person. My taxable salary is Rs. 5,40,000 on

which tax has duly been deducted under section 192. During

finalization of return, I found that my bank has given me a credit of Rs.

1,24,500 towards interest. Please guide me how best to proceed in such

case?

In this situation you have to pay the balance taxes on the interest income (or any

other income) before filing of return. Balance taxes should be paid along with

interest under sections 234B and 234C. The tax and interest can be paid in any

authorized bank through Challan No. ITNS 280. Alternatively, it can be paid

through online bank portal through following link

https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp

Q65. I have Fixed Deposit ('FD') of Rs. 1,50,000 in bank and my total

income (including interest income that would accrue on FD) is below

the taxable limit. How to avoid deduction of tax on interest income?

You can file a self-declaration to the bank in Form 15H if you are a senior citizen.

Otherwise, you can file self-declaration in Form 15G.

Q66. How to avoid deduction of tax, if my interest income on saving

deposits exceeds Rs. 10,000 and my total income including such

interest income would be below the taxable limit?

Only interest income on time deposits which exceeds Rs. 10,000 would attract tax

deduction at source. Thus, interest accrued on saving deposits would not attract

TDS.

Q67. My Return has been processed and it shows 'Outstanding Tax

Demand'. What should I do now?

Now a facility has been made available to taxpayers on the E-filing website (i.e.,

www.incometaxindiaefiling.gov.in) to provide online responses to such demands.

The actions required to be performed by the taxpayer are prescribed as under:

1. Login to https://incometaxindiaefiling.gov.in then go to e-file menu and click on 'Response to Outstanding Tax Demand".

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2. Select one option out of the following: (a) Demand is correct (b) Demand is partially correct (c) Disagree with demand 3. If option of "Demand is correct" is selected then a pop up is

displayed as "If you confirm "Demand is correct" then you cannot 'Disagree with the demand'. If any refund is due to assessee then outstanding demand along with interest will be adjusted againstrefund. If no refund is due to assessee then taxpayer has to immediately pay the demand.

4. If an option of "Demand is partially correct" is selected then taxpayer is required to enter the "Amount which is correct" and "Amount which is incorrect". After selecting amount which is incorrect taxpayer should mandatorily fill up reasons from the specified list.

5. If an option of "Disagree with demand" is selected then taxpayer is required to furnish the details of disagreement with demand along with the reasons from the specified list.

6. After the taxpayer submits the response the success screen would be displayed along with the Transaction ID.

Q68. Whether I need to pay fee under Section 234F if there is a delay in

filing my income-tax return for AY 2018-19?

Up to Assessment Year 2017-18, if assessee failed to file the return of income

before the end of the assessment year, penalty under Section 271F could be

imposed by the Assessing Officer. This penalty provision was omitted by the

Finance Act, 2017.

In lieu of such penalty, the Finance Act, 2017 levied a new fees if assessee does not

furnish the return of income on the due dates prescribed under Section 139(1). The

amount of such late filing fees shall be:

1. Rs. 5,000 if return is furnished after the due date but before December 31 of the Assessment Year [Rs. 1,000 if total income is up to Rs. 5 lakhs].

2. Rs. 10,000, in any other case.

After introducing this new provision, the assessees shall be required to pay the late

filing fees under section 234F along with interest under section 234A, 234B and

234C before filing of return of income. The Income-tax Dept. shall not be required

to initiate the penalty proceedings separately to levy such fees on late filers. The

details of fees levied under Section 234F shall be reported in Part B TTI.

Q69. I have received cash gift of Rs. 1,00,000 from my childhood

friend. Am I required to disclose the gift in my return of income?

As per section 56(2)(x), gifts received from relatives are fully exempt from tax.

However, gifts received from non-relatives are taxable if they exceed Rs. 50,000.

The term 'relative' is defined in section 56(2)(x) and it doesn't include a friend.

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Therefore, cash gift of Rs. 1,00,000 is taxable in your hand and you will be

required to report taxable gifts under 'Schedule OS' of ITR Forms.

Q70. I have received overtime payment for extra work from my

employer. Is it taxable?

Salary also includes overtime payment received from the employer. Hence, it will

be taxable under the head income from salary.

Q71. I am getting monthly pension from government. Is my pension

taxable?

Monthly pension received from any employer, either Government or

non-government would be taxable in hands of employee under the head Salaries.

Q72. I am having rental income from sub-letting of my property.

Whether it is taxable as income from house property?

It will be taxable under the head "Income from other sources" and not under the

head income from house property.

Q73. I am getting parking charges from my plot of land. Whether this

income is taxable under the head income from house property?

Parking Charges will form part of your taxable income and same shall be taxable

under the head "Income from other sources", because rental income from land is

not taxable under the head income from house property.

Deductions & Rebate

Q74. What is Section 87A rebate and who can claim it?

An individual who is a resident in India and whose total income does not exceed

Rs. 3,50,000 is entitled to claim rebate under section 87A. Rebate under section

87A is available in the form of deduction from the tax liability. Rebate will be lower

of 100% of income-tax liability or Rs. 2,500. In other words, if the tax liability

exceeds Rs. 2,500, rebate will be available to the extent of Rs. 2,500 only and no

rebate will be available if the total income (i.e., taxable income) exceeds Rs.

3,50,000.

Q75. I am a Govt. employee and have received arrears of salary as per

recommendations of 7th pay commission. Whether I need to file any

form to claim relief under Section 89 in my income-tax return?

If you want to claim relief under 89, it is mandatory to file Form 10E online on the

e-filing website. Taxpayers who claim relief under Section 89 without filing Form

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10E, will get notice from Income-tax Dept. stating that "The relief under Section 89

has not been allowed in your case, as the online form 10E has not been filed". Thus,

you are required to file Form 10E online before filing your income-tax return.

Q76. My employer has deducted tax without allowing relief of section

89. Can I claim the relief while filing the return of income?

If the employer fails to provide relief under section 89 and deducts excess tax, then

you can claim such relief in your return of income and claim refund of excess tax

deducted. However, it is mandatory to file Form 10E online on the e-filing website.

Q77. How to file Form 10E?

Form 10E can be filed online. Login to https://incometaxindiaefiling.gov.in with

your User ID and password along with the date of birth. After you log in, click on

tab e-File > Income Tax Forms. On the landing page select the following

options:

Form Name: Form No. 10E – Form for relief u/s 89

Assessment Year: 2018-19

Submission Mode: Prepare and Submit Online

Q78. I failed to submit rent receipt and proof of tax saving investment

to my employer due to which HRA exemption and certain other

deductions were not given to me. How can I claim refund of such

excess tax paid, as the tax deducted from my salary income is higher

than my actual tax liability?

Even if exemption of House Rent Allowance under section 10(13A) and deductions

under Chapter VI-A are not considered by the employer in Form 16, yet they can be

claimed in the income-tax return. Accordingly, the excess tax deducted by

employer can be claimed as refund.

Q79. How to claim deduction of donation given to an organization

registered under section 80G?

If you have given donation to an organization registered under section 80G you can

claim deduction by filing the return of income wherein you are required to provide

following details:

1. Name of donee; 2. PAN of donee; 3. Address of donee; and 4. Amount of donation.

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Q80. Can I claim deduction of interest on housing loan under section

80C?

Repayment of only principal portion of housing loan will be allowed as deduction

under section 80C within the overall limit of Rs. 1,50,000. However, such

deduction is available if housing loan is borrowed by assessee from:

1. Central Government or any State Government 2. Banks, including a co-operative bank 3. LIC 4. National Housing Bank 5. Domestic Public company providing long-term finance for

construction or purchase of houses in India 6. Assessee's employer, being an authority or a board or a

corporation or any other body established or constituted under Central or State Act

7. Assessee's employer, being a public company or a public sector company or a university or a university established by law or a college affiliated to such university or a local authority or a co-operative society.

However, interest on housing loan is deductible under section 24(b) while

computing income chargeable to tax under the head "Income from house

property".

Q81. I have filed my return of income; however, I omitted to claim

benefit of section 80C deduction. How should I proceed to claim this

benefits?

The benefit of an omitted claim can be availed only by filing a revised return. You

may revise your return of income before the end of the relevant assessment year or

before completion of assessment, whichever is earlier. With effect from

Assessment Year 2017-18, a belated return can also be revised if there is any

omission or wrong statement in the return of income.

Q82. I am a salaried person, drawing House Rent Allowance ('HRA') of

Rs. 2,900 per month. Do I need to furnish rent receipt to employer for

claiming exemption of HRA?

Though actual expenditure on payment of rent is a prerequisite for claiming

deduction of HRA, yet as an administrative measure salaried employees drawing

HRA of up to Rs. 3,000 per month are exempted from production of rent receipt to

employer.

Q83. My HRA is Rs. 3,000 per month. Can I claim exemption of HRA

even if I have not incurred any expenditure on payment of rent?

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Exemption under Section 10(13A) in respect of house rent allowance is allowed to

enable employees to pay rent for their residential house. No deduction shall be

allowed if employee does not incur anything on his house rent. As an

administrative measure salaried employees drawing HRA up to Rs. 3,000 per

month are exempted from production of rent receipt. However, this concession is

only for the purpose of tax-deduction at source. In the regular assessment of the

employee, the Assessing Officer will be free to make such enquiry as he deems fit

for the purpose of satisfying himself that the employee has incurred actual

expenditure on payment of rent.

Q84. Whether it is mandatory to furnish PAN of the landlord to

employer for claiming exemption of HRA?

If annual rent paid by the employee exceeds Rs. 1,00,000 per annum, it is

mandatory for the employee to report PAN of the landlord to the employer. In case

the landlord does not have a PAN, a declaration to this effect from the landlord

along with the name and address of the landlord should be filed by the employee.

Q85. How much deduction can I claim in respect of interest paid on

loan taken for purchase of house property?

Deduction of housing loan interest is allowed as deduction under two sections, i.e.,

section 24(b) and Section 80EE.

Section 24(b) allows deduction of interest of paid on loan taken for purchase,

construction or renovation of property. The deduction under this section is allowed

in following manner:

1. Let-out property: Entire interest amount paid on the housing loan taken for the purpose of acquisition, construction, repairing, re-construction is allowed as deduction.

2. Self-occupied house property:Interest paid on housing loan taken for the purpose of acquisition or construction of house property is allowed as deduction up to Rs. 2,00,000. If loan is taken for the purpose of reconstruction, repairs or renewals of property, then amount of deduction is restricted to Rs. 30,000.

Section 80EE allows additional deduction of up to Rs. 50,000 to the first time

home buyers for the interest paid on housing loan. Such deduction is allowed

subject to following conditions:

1. Value of residential house doesn't exceed Rs. 50 lakhs 2. Sanctioned Loan amount doesn't exceed Rs. 35 lakhs 3. Loan has been sanctioned between 01.04.2016 to 31.03.2017 4. Taxpayer does not own any other residential house property on the

date of sanction of loan. Set-off of losses

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Q86. I am a part time employee and am also running a provision store.

I suffered loss in business. Can I adjust the business loss against my

salary income?

Loss from business/profession cannot be adjusted with salary income. Hence, you

cannot adjust the business loss against your salary income.

Q87. I sold gold after holding it for 13 months and suffered loss

thereon. Can I adjust this loss against my salary income?

Loss on sale of capital asset is termed as capital loss and capital loss can be

adjusted against capital gains only. Hence, loss on sale of gold cannot be adjusted

against salary income.

Q88. I have earned salary income of Rs. 8,00,000 during the

Assessment Year 2018-19 and am also having loss of Rs. 3,00,000 from

house property. Can I set-off loss from house property against my

salary income?

Section 71 allows set-off of losses from house property against any other income.

However, w.e.f. Assessment Year 2018-19, losses under the head 'house property'

shall be allowed to be set-off only to the extent of Rs. 2,00,000 in any assessment

year.

Thus, only loss of Rs. 2,00,000 can be adjusted against your salary income and loss

of Rs. 1,00,000 shall be carried forward for set-off in subsequent years.

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