1. I had filed my ITR in June and found out some income was not reported. The tax return is also processed. Should I pay the extra tax and file a revised return?—Ankush Duggal
Yes you should pay the extra tax and file a revised return, and do it in this order: First pay the tax due on the omitted income including applicable interest (234B/234C) for the delay and then file a revised return under Section 139(5) reflecting the correct total income. If your income tax return has been processed, you can still file a revised return within the specified due date. The revised return fully replaces your original one.
2. I sold a commercial property last month. How should I calculate the capital gains tax and pay the amount?—Vivek Kumar
Assuming the commercial property is a capital asset and not a depreciable asset, the first step is to work out whether the gain qualifies as long-term or short-term. This depends on how long you hold the property: more than 24 months makes it a long-term capital gain (LTCG), while 24 months or less makes it a short-term capital gain (STCG). The capital gain amount is arrived at by taking the sale price and deducting the cost of acquisition, cost of improvement, and transfer expenses (indexed, if you choose that method for LTCG). The STCG simply gets added to your regular income and taxed at your applicable slab rate. If it’s LTCG, the default rate is 12.5% without indexation. However, if you originally bought the property before July 23, 2024, you get a choice between two methods; (i) 12.5% without indexation, or (ii) 20% with indexation, whichever works out lower for you.
If your total income including this LTCG exceeds Rs 50 lakh, a surcharge also applies on the tax amount, with a further 4% cess on top. You can reduce the tax outgo by reinvesting the gains. Since this is a commercial property, Section 54 (which is for residential property) won’t apply, but you can use Section 54F if you invest the net sale proceeds in a residential house, or Section 54EC by investing up to `50 lakh in specified capital gains bonds within six months of the sale.
3. My parents have a few acres of agricultural land, which they sold a year before. As they have decided to give me `40 lakh from the sale proceeds, do I have to pay tax on the amount?—Raman Gulati
According to Section 56 of the Income-tax Act, any gift received from a specified relative, including a parent, is fully exempt from income tax, regardless of the amount. Accordingly, you are not required to pay any tax on it, but it is advisable to maintain a gift deed or written confirmation for record-keeping purposes.
The writer is senior partner, Nangia & Co LLP. Send your queries to fepersonalfinance@expressindia.com
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Investors should assess their financial goals, risk appetite and consult a qualified financial advisor before making investment decisions.
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This article was first uploaded on September eighteen, twenty twenty-six, at thirty-five minutes past seven in the evening.
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