How are capital gains from shares held abroad treated for India residents?
– Dinesh Kenkre
Any income arising to a resident of India from any source shall be taxable in India. Hence, income earned from the transfer of shares held by a resident of India in a foreign country will be taxable under the head “income from capital gains” in India. The capital gains shall be computed by deducting from full value of consideration, cost of acquisition and expenses incurred on such transfer. However, certain exemptions can be claimed as stipulated by the law.
I sold 100 Canara Bank shares and 200 SBI shares on March 29, 2019. The shares were bought in 2002 and 1994. Acqui-sition value was Rs 20,000. I sold them for Rs 92,935. Do I have to file ITR 2?
—Janaki Krishnaswamy
An individual having any income/ loss under the head ‘capital gains’, shall be required to file return in the form ITR-2 provided he earns income only from limited sources, i.e., salary income, income from one house property and income from other sources. As you have neither earned income nor incurred loss from capital gains during FY 2019-20, you can file in Form ITR-1 given other conditions are satisfied.
I sold my residential property for `1.40 crore in December 2018. The site was bought in 1991. First and second floors were constructed in 1993. The capital gain is `75 lakh. I have bought another property for `80 lakh. Can I buy another house with the remainder?
—Sachin Kumar
An individual can claim exemption of capital gains arising on sale of a residential property by investing in another property under Section 54 within the prescribed time. Since, you have invested `80 lakh already within the specified time period, your entire capital gain of `75 lakh stands exempt and you shall not be required to undertake any other investment.
I am a senior citizen. My son transfers Rs 40,000 to my bank account every month. Should I indicate this sum in my tax returns under ‘exempt income’ or can I ignore it?
—AV Subramanian
Any sum of money received from relatives is exempt from income tax. However, all such receipt should be fairly reported in ITR. Hence, sum received by you from your son should be disclosed in the ITR under the head ‘exempted income’.