TDS refund to be claimed only on filing ITR for final tax liability

By Chirag Nangia

I am 61 and do not have any regular income. I did not file ITR for FY 2018-19 as interest income was Rs 2.20 lakh. I want to sell my house and buy a new one. Should I file a nil ITR for FY 2019-20? The house will be sold for around Rs 85 lakh while the new one will cost around Rs 1.10 crore. How do I get refund of TDS on sale of my house?
—Alok Kapur
Obligation to furnish an ITR arises when total income (without giving effect to exemptions under section 54/54F or deduction under chapter VI A) exceeds maximum amount not chargeable to income tax. For filing ITR for FY19-20, you have to compute income from all sources and if it exceeds basic exemption limit of Rs 3 lakh, you have to furnish ITR, giving the particulars of your income. If the house is sold in November 2020, capital gains arising on sale would arise in FY 2020-21, in respect of which you shall be required to file an ITR on or before July 31, 2021. You have to deduct cost of acquisition from the sale consideration to arrive at the taxable capital gains. If the property is held for more than 24 months then the result-ant capital gains would be classified as ‘long-term’ and if the same are invested for purchase of another house, then you claim exemption under Section 54. At the end of the financial year, while filing ITR, final tax liability has to be determined by including income from all sources. TDS can then be claimed as credit from this final tax liability. Excess of TDS over the final tax liability shall be refunded by credit to your bank account. If income is correctly disclosed in the ITR, the income tax department may not raise a query.

If listed shares are gifted to a relative, what amount needs to be mentioned in the ITR of the donee in exempt income—cost to previous owner/donor or the market value as on date of the gift?
—Manish I Mehta
Assuming that the shares were received from a ‘relative’ as defined under I-T Act, the FMV shall not be chargeable to tax. However, the same shall form a part of your total income and shall have to be disclosed in Schedule EI of the ITR form. Upon sale, the capital gains shall be computed by deducting the cost of acquisition from the sale consideration. The cost of acquisition shall be deemed to be the cost at which the immediate previous owner of the shares acquired it.

The writer is director, Nangia Andersen Consulting. Send your queries to fepersonalfinance@expressindia.com