I purchased a flat at Rs 7 lakh on June 2006 and sold it at Rs 65 lakh in July 2012. To save income tax, I want to invest Rs 50 lakh in the bonds of Rural Electrification Corporation. What is my capital gains tax?
Nityananda Mondal, Hooghly
The cost inflation index for 2006-07 is 519, while it is 852 for 2012-13. Therefore, the indexed cost of acquisition is Rs 11.49 lakh (Rs 7 lakh x 852/519). The capital gain on transfer is Rs 53.51 lakh (Rs 65 lakh-Rs 11.49 lakh). Section 54EC of the income tax act provides exemption on capital gains for investment in "specified assets" and the bonds of Rural Electrification Corporation are included in it. Your capital gains is Rs 53.51 lakh and your investment in bonds is Rs 50 lakh. So, the net taxable capital gain is Rs 3.51 lakh subject to a long-term capital gains tax of 20.6 per cent.
For the last two consecutive fiscals (2011-13), the bank has deducted TDS from interest accrued from FDs of Rs 25,000 per year. I had submitted Form 15H and the bank had issued TDS certificates for both the years so that I may get refund by submitting IT return. I used to submit return at New Delhi till 1996. When I came back to Calcutta, I stopped submitting the return as my taxable income was nil. Where shall I now submit the return to get the refund?
Tapan Kumar Majumdar, Calcutta
Your income tax master data must be showing the permanent account number (PAN) with reference to the New Delhi address since you have filed the return till 1996 there. You have to change the address against your PAN data through Form 49A. For getting the tax refund, you have to show a savings bank account with the account number and the MICR code encrypted in the cheque book that will reflect the correspondence address where the income tax department can send the refund. You can then file the income tax return for the relevant two years from the current Calcutta address specifying the ITO ward having territorial (Calcutta) jurisdiction as specified in the PAN allotment forwarding letter.
If you have any queries about investing or taxes or a high-cost purchase you are planning, mail to: firstname.lastname@example.org, or write to: Business Telegraph, 6 Prafulla Sarkar Street, Calcutta 700 001.