'Help: Paid tax, still got IT demand notice'

Do you have income tax-related queries?
Please ask your questions HERE and rediffGURU Samkit Maniar, a CA from The Institute of Chartered Accountants of India with eight years of experience, will answer them.

Anonymous: My spouse is a dancer, teaching dance to the student at a rented location and earns income which is paid by UPI Payment. For the last year 2022-23, her earnings was close to 2,30,000, and have paid close to 36,000 for the rent. Whether tax file is necessary? If yes ,which one, and whether 80c (ppf), NPS deductible applies?

Since her income is below basic exemption limit, she may not file return of income. However, if in the long run, a loan is required in her name then financial institutions will ask for return (ie tax file) to be filed.

If you file the return, 80c and NPS applies.

Saurabh: Opted for 115bac form paid tax accordingly but still got demand notice under section 1431a

Before answering the question, just wanted to understand whether you had informed the employer that you will opt for new tax regime? If not, then this may be the issue because your employer must have factored all the deductions and deducted your TDS accordingly.

Please note that this is one scenario wherein the possible issue may have arisen. Kindly check with your CA as well and take appropriate actions. Thanks

Vinod: Income received from sale of property can be utilized for son's foreign education and tax implications if any.

You need to keep two things in mind:

1. Appropriate taxes need to be paid on sale of property depending upon short term / long term capital gains and

2. Upon remittance of such income (after taxes), there will be a deduction of 5% as tax collected at source (if remittances are more than INR 7 lacs), which will be refundable upon filing your tax return.

This 5% is just an additional cash flow requirement that you need to be mindful of.

Atul: I sold a residential property in Aug 2021 and made a capital gains of 40 lakhs which i have deposited in a Capital gain account, my query is - What is the deadline for me to invest in a new property so as to claim tax exemption on CG and Can I invest in an under construction property which will take another year or more to complete?

Unfortunately, the timelines to invest the amount has elapsed. You should have bought the property one year prior to sale or two year after sale. If you are looking to construct the property yourself you get 3 years after sale as a timeline to invest.

Please seek guidance from your CA on this as you may need to reverse the deduction claimed in 2021 in your current year tax returns that you will file.

Anonymous: Tax implications of money sent to close relative abroad from India

There is a restriction to the extent of USD 2,50,000 per financial year by a resident Indian transferring money abroad. Further depending upon the purpose of utilisation (ie health or education or maintenance), the tax will be collected at source.

Please note that this tax is refundable at the time of filing your returns in India but it is an upfront cash outflow.

• You can ask rediffGURU Samkit Maniar your questions HERE.

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Any use of the information/any investment and investment related decisions of the investors/recipients are at their sole discretion and risk. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Opinions expressed herein are subject to change without notice.