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Your queries: Income Tax

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By Chirag Nangia

*I opted for the new tax regime at the start of 2021-22 and there is excess tax deduction. How can I change to the old tax regime at the time of filing ITR?

—Atul Khare

It has been clarified by the CBDT that intimation to employer declaring intention to opt for concessional tax regime shall only be for the purpose of TDS, which cannot be modified during the year. However, at the time of filing the return of income, one may switch to the old regime. Thus, options at the time of filing of return may be different from intimation made by employee to employer. The ITR Form asks the choice of the individual and tax is computed accordingly. The TDS in excess of the final tax liability (ascertained after taking into account the allowable deductions/ exemptions), may thus be claimed as refund by opting for the old regime in the ITR.

* I am a 79-year-old woman. My husband had bought a revenue site 40 years ago and after his death in 1991, the property was transferred to my name. I built a small house and sold it last year. I got `18 lakh. I am a family pensioner and have some income from FDs. Do I need to file ITR for this transaction and how do I save tax?

—Sharadamba N

Since the property was held for more than 24 months, the capital gains on sale is classified as long-term capital gain (LTCG). As you inherited the property, the cost of acquisition shall be the higher of the actual cost to your husband or FMV as on April 1, 2001. Any cost incurred thereafter is treated as ‘cost of improvement’ . Both these costs have to be subtracted, after indexation, from the sale value to arrive at the taxable capital gains. If this LTCG is invested for buying a house (within two years from date of transfer) or for construction of a residential dwelling (within 3 years from the date of transfer), then it will be exempt from tax.

Furthermore,the exemption limit for filing ITR FY22 for those above 60 years is `3 lakh. If your total income is more than this, you have to disclose the details of all incomes earned including the details of this sale in ITR 2.

The writer is director, Nangia Andersen LLP. Send your queries to [email protected]

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