I am a male senior citizen aged 65. My income comprised pension, FD interest, rent from house property, dividend and occasional capital gains from securities transactions (long term). My bank, for reasons not known, does not recover tax at source. Tax on my income is computed as per IT rules and paid at the time of filing returns. My auditor says that penalty for non-payment of advance, as set out under Section 234 A B and C, is to be paid along with the tax amount.
What are the provisions regarding advance tax? Will it be applicable to me? Am I not exempt as a senior citizen ?
N Kalyanasundaram
Yes, as a senior citizen, you are exempt from payment of advance tax. Section 207 of the Income Tax Act (‘Act’) provides that an individual aged 60 years or more at any time during the financial year (senior citizen) is exempt from paying advance tax, provided such an individual does not have any income from business or profession.
Since you are 65 and are not carrying on business or profession, interest for delay/deferment in remittance of advance tax under Sections 234B and 234C will not arise. It may be noted that interest under Section 234A will arise only when the tax return is not furnished within the prescribed due date.
I have been dealing in the stock market since 40 years. Recently, on February 22, 2017 I transferred shares from my demat account (my husband is the joint holder) to my husband's demat account (I am the joint holder) through the off-market mode (where STT is not paid) with a view to closing my demat account by end of this March. Since 1975 onwards, I have been filing tax returns every year.
Out of the shares transferred on 22-02-2017, both long-term as well as short-term holdings are there. What are the income tax implications?
I also request you to kindly let me know whether the shares transferred have to be shown in my books of accounts at the book value or at the rate prevailing as on the date of transfer.
T Sandhya Devi
Transfer of capital asset under a gift does not attract capital gains tax as it is exempt under Section 47(iii) of the Act.
If the transfer of shares through the off-market mode to your husband’s demat account has to be regarded as gift, it is advisable to execute a gift deed for such transfer.
Transfer of moveable assets among specific relatives (includes spouse) is exempt from tax in accordance with Section 56(2)(vii) of the Act. Accordingly, the said transfer is exempt in the hands of your husband.
It may, however, be noted that, income arising from shares transferred to your husband without consideration will continue to be taxed as your income in accordance with the clubbing provisions (Section 64(1)(iv)) of the Act. Your books of account should reflect the transfer.
The writer is Partner, Deloitte Haskins & Sells LLP. Send your queries to taxtalk@thehindu.co.in