income tax

This query is : Resolved

Deepti Gunwani (Querist)
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08 January 2011 Mr. X is having a home loan jointly with his wife. on 31.03.2010 the o/s balance in home saver was Rs. 3504650 which is shown in the balance sheet of both as loan. On that date they had Rs. 600000 deposits in their bank accounts and on that money they have paid taxes in prev. year. Now they have o/s balance till date Rs. 3200000 and they have earned in this year Rs. 2995000 out of which Rs. 18 L is from sale of shares in Mr. X's Co. on which tax has not been paid yet. rests is there income from business on which TDS has been deducted. now he wants to repay his loan. Kindly let me know will the tax department ask for the sources of entire Rs. 32L or lesser amount as 6L was available in the prev year on which the tax has been paid. Kindly help me out in this problem should he repay the loan this year and other tax implications. Also explain me about the tax savings on capital gain tax from receipts of Rs. 18L

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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08 January 2011 Yes , It deptt. may get explanation of sources of fund used for discharging the loan.

1. No exemtion is allowed on ST gain.

Deepti Gunwani

Deepti Gunwani (Querist)
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08 January 2011 Sir,
Thanks for your reply. But as I have already written that this income is already tax deducted. That is true that IT dept. will ask for the explanation I want to know will there be any kind of other tax as the income is already tax paid except that 18L

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CA. Himansu Sekhar Kabi

CA. Himansu Sekhar Kabi (Expert)
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10 January 2011 Deepti,

You may asked to explain the source of income(in different period of time)to puchase the shares sold for Rs. 18L. if you can offer valid explanation to the satisfaction of the AO, i do't see any problem else the AO may invoke sec 68/69/69C as the case may be. If the income from the sale of shares is LTCG you may take the benifit of Sec 54EC or Sec 54F.