WhicMethod of a/cing to be followed ????????

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

17 May 2011 Hello experts!
We have a new client age 79 yrs.Uptill now she has never filed any Return as she is a house wife and had no personal income.In the FY2010-2011 she recieved the following amt for sale of land (taxable as per IT definition) whic she inherited frm ancestor.
35,000 ,Rs35,000 etc during the whole yearat specified interval as an advanced till total reached Rs7,00,000/- as cosideration of sale. But actual trf of ownership did nt take place untill 30.3.2011

Qurries are as follows :

1.She had invested whnever money was rec inFD for short term period & after 1.4.2011 7,00,000 will be invetsd in SEC54EC-NHAI BONDS for exempetion. so som amt is still in fd s thn whth "Int on fds shld be taken on "ACCRUAL basis or RECIEPT basis
considering this is d first tim she filint ITR and has no other incom?

2.She did nt pay advance tax(during FY 2010-11) as she was going to invets the whol cosideration in NAHI bonds.
Whther ANY INTREST WILL BE LEVIED U/S234B/C? WHEHER ANY PENALTY IS LEVIABLE for non payment of ADVANCE TAX condiering that after investing in NHAI bonds ther in no tax payable i.e. NIL tax comes after calculating tax on Total income ?

pls reply n thnxx in adv.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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17 May 2011 1.She had invested whnever money was rec inFD for short term period & after 1.4.2011 7,00,000 will be invetsd in SEC54EC-NHAI BONDS for exempetion. so som amt is still in fd s thn whth "Int on fds shld be taken on "ACCRUAL basis or RECIEPT basis
considering this is d first tim she filint ITR and has no other incom?

Ans It will be better to Show interest on FDR on Accrual basis as Bank will deduct TDS on the accrual basis only.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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17 May 2011 2.She did nt pay advance tax(during FY 2010-11) as she was going to invets the whol cosideration in NAHI bonds.
Whther ANY INTREST WILL BE LEVIED U/S234B/C? WHEHER ANY PENALTY IS LEVIABLE for non payment of ADVANCE TAX condiering that after investing in NHAI bonds ther in no tax payable i.e. NIL tax comes after calculating tax on Total income ?

Ans: She is not liable to pay Advance Tax as no capital gain has arisen to her so far , on the basis of factual position that the transfer of property has yet not taken place.

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Querist : Anonymous

Querist : Anonymous (Querist)

17 May 2011 Thnk u sir for your valuable reply!

bt in case of ur first reply ther is no q of TDS to be deduccted by bks since she has smartly invetsed in suc a manner tht total intrst does not exceed rs 10,000/- in any of the fds as she has taken diff fds of diff bks thn on whic basis to be shown

becoz since trf took in the yr of 2010-2011 she is getting an exemption limit of RS 240,000/- & if i tak it on accrual basis thn intrst crosses rs2,40,000 n she need to pay tax.if i tak it on recpt basis thn it splits in 2 diff FY n gets adv of more slab limit i.e Rs5,00,000 for AY 2012-13.

so is theR ny prov/circular/notification whic mention tht for people with INCom frm other sources only must go in for accrual basis n nt recpt basis???
Thnk u sir once again.

CA MANOJ GUPTA

CA MANOJ GUPTA (Expert)
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17 May 2011 ONE THING U HAVE NOT DISCUSSED WHETHER SHE HAS GIVEN THE POSSESSION OF PROP TO BUYER IF YES THEN THE CAPITAL GAIN WILL ACCRUE EVEN IF THE TRANSFER IS REGISTERED LATER ON
CA MANOJ GUPTA
JODHPUR
09828510543

Querist : Anonymous

Querist : Anonymous (Querist)

17 May 2011 No possession is wit us only