File ITR-2 to show salary, capital gains income

SC Vasudeva

Q. I, a salaried employee, have following incomes: Gross salary: Rs 5,20,200; Bank FD: Rs 35, 000; and Long-term capital gain (equity mutual fund): Rs 30,000.Do I need to mention tax-free LTCG (equity mutual fund) of Rs 30,000 in the gross income? Can I show this LTCG income as exempt income (under Section 10(38)) in the ITR-1? Which ITR form is applicable to me? — Khush Goyal

A. The form which you are required to file for declaring your income would depend on the income derived from various sources.  As you are having salary and interest income only and the exempt amount of long-term capital gain, the applicable form in your case shall be ITR-2.  The exempt amount of capital gain be shown in the column which requires an assessee to furnish details of income which are exempt from tax.  The exemption in respect of amount received on redemption of equity-oriented mutual funds should be claimed in case you are sure that the income from the LTCG earned is exempt from tax. It may be added that such exemption is available up to assessment year 2018-19.

Q. My bachelor son and married daughter are living in the US. Both are green cardholders. I and my wife are living in Haryana. I have some self-acquired property in Punjab and Haryana. We also have some fixed deposits in banks. How much money we can gift to each of our children in a financial year or lumpsum after selling our property or out of fixed deposits? What will be other formalities apart from paying long-term capital gain tax on our part? What will be the formalities on the part of our children? — Meghraj 

A. Your queries are replied hereunder:-

a) You can remit an aggregate amount of $2,50,000 as gift to both your son and daughter in a financial year.  The formalities required in this regard will be explained to you by the bank official concerned who is handling such remittances.

b) The sale of immovable property would involve tax payment on the amount of capital gain earned on the sale of such property.  The amount of capital gain will be computed after deducting from the sale consideration, the indexed cost of immoveable property and the expenditure incurred wholly and exclusively for such sale.  The relevant index for the purposes of such computation has been notified by the government. The amount of chargeable tax on the amount of long-term capital gain will be 20% plus health and education cess of 4% thereon.  This rate is applicable for the assessment year 2019-20.  The amount of tax will have to be paid on the due date on which advance tax is payable.  Your children would not be subjected to any tax with regard to the amount gifted to them by you.

Q. I, a Haryana Government employee, contribute more than Rs 5,000 per month from my salary to the National Pension Scheme (NPS).  At present, I avail exemption of this amount under Section 80CCD and contribute extra Rs 50,000 to avail exemption under Section 80CCD(1B). I want to contribute in other saving schemes as well. Can I avail exemption of Rs 50,000 under Section 80CCD(1B) from the amount compulsorily deducted from my salary and of the amount exceeding Rs 50,000 under Section 80CCD? — Kunal Wadhwa

A. You can claim both deductions i.e. the amount contributed under section 80CCD(1) of the Income Tax Act, 1961 (The Act) to the extent of 10 per cent of your salary as well as an additional amount of Rs 50,000 contributed under section 80CCD(1B) of the Act.  You are, thus, entitled to claim a total deduction of Rs 1,50,000 under Section 80C and 80CCD(1) of the Act and an additional deduction of Rs 50,000 under section 80CCD(1B) of the Act.

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