Long term capital gain
This query is : Resolved
21 July 2018
I have missed to show long term capital gain on shares in exempt column in ITR2 FOR F/Y 16-17
Will i face any penalty
can i rectify it
Will i face any penalty
can i rectify it
21 July 2018
Rectify the return....
21 July 2018
No penalty.......................
21 July 2018
IS IT MANDATORY TO SHOW EXEMPT LONG TERM CAPITAL GAIN ON SHARES IN RETURN
WHAT CAN BE THE OTHER CONSEQUENCE OF NOT SHOWING IT
WHAT CAN BE THE OTHER CONSEQUENCE OF NOT SHOWING IT
21 July 2018
IS IT MANDATORY TO SHOW EXEMPT LONG TERM CAPITAL GAIN ON SHARES IN RETURN
WHAT CAN BE THE OTHER CONSEQUENCE OF NOT SHOWING IT
WHAT CAN BE THE OTHER CONSEQUENCE OF NOT SHOWING IT
03 August 2024
Here’s a detailed response to your queries regarding the missed disclosure of long-term capital gains (LTCG) on shares in your income tax return for FY 2016-17:
### **1. Penalty and Consequences of Not Showing LTCG**
**a. Penalty for Non-Disclosure:**
- **No Specific Penalty for Missed Exempt LTCG Disclosure**: There is no specific penalty solely for missing the disclosure of exempt LTCG in your return. However, failing to accurately report income can lead to general penalties if it results in underpayment of taxes.
- **General Penalties**: If the omission leads to underpayment of taxes, the penalties could include:
- **Interest on Late Payment**: Interest under Section 234A, 234B, and 234C for delayed filing and payment of taxes.
- **Penalties under Section 270A**: Penalties for underreporting or misreporting of income.
**b. Rectification of Return:**
- **Revised Return**: You can file a revised return to correct the omission. For FY 2016-17, the due date for filing a revised return was typically the end of March 2018, but the Income Tax Department may still allow rectification through the “rectification” process under Section 154, depending on the circumstances.
- **Procedure**: To rectify, file a revised return under Section 139(5) if within the allowed timeframe, or request rectification if the original return was processed.
**c. Mandatory Disclosure:**
- **Exempt LTCG**: For FY 2016-17, LTCG on listed shares, exceeding ₹1 lakh, was exempt under Section 10(38). It is important to report exempt LTCG to ensure transparency and proper compliance with tax regulations.
**d. Consequences of Non-Disclosure:**
- **Assessment Risks**: Non-disclosure of LTCG might raise issues during a tax audit or assessment, particularly if it impacts the computation of taxable income.
- **Future Scrutiny**: Discrepancies or omissions might lead to increased scrutiny in future assessments.
### **Steps to Take**
1. **Review Your Return**: Verify if the omission affects the tax liability. If the LTCG was exempt, it should not change your tax payable but needs to be correctly reported.
2. **File a Revised Return**:
- **For FY 2016-17**: You may not be able to file a revised return if the deadline has passed. In such cases, approach the Income Tax Department for rectification.
3. **Rectification Application**:
- **Section 154**: You can file a rectification application if the original return was processed and there is a mistake apparent on record.
4. **Consult a Tax Professional**: If you’re uncertain or face complications, consulting a tax advisor or professional is advisable to ensure compliance and address any issues.
### **Summary**
- **Penalties**: Penalties are more related to underpayment or misreporting, not just missing exempt disclosures.
- **Rectification**: Aim to rectify the return if possible, or seek advice from a tax professional.
- **Mandatory Reporting**: While LTCG on shares was exempt, proper reporting ensures compliance and transparency.
For precise and personalized advice, always consider consulting with a tax professional who can provide guidance based on your specific situation and the current regulatory environment.
### **1. Penalty and Consequences of Not Showing LTCG**
**a. Penalty for Non-Disclosure:**
- **No Specific Penalty for Missed Exempt LTCG Disclosure**: There is no specific penalty solely for missing the disclosure of exempt LTCG in your return. However, failing to accurately report income can lead to general penalties if it results in underpayment of taxes.
- **General Penalties**: If the omission leads to underpayment of taxes, the penalties could include:
- **Interest on Late Payment**: Interest under Section 234A, 234B, and 234C for delayed filing and payment of taxes.
- **Penalties under Section 270A**: Penalties for underreporting or misreporting of income.
**b. Rectification of Return:**
- **Revised Return**: You can file a revised return to correct the omission. For FY 2016-17, the due date for filing a revised return was typically the end of March 2018, but the Income Tax Department may still allow rectification through the “rectification” process under Section 154, depending on the circumstances.
- **Procedure**: To rectify, file a revised return under Section 139(5) if within the allowed timeframe, or request rectification if the original return was processed.
**c. Mandatory Disclosure:**
- **Exempt LTCG**: For FY 2016-17, LTCG on listed shares, exceeding ₹1 lakh, was exempt under Section 10(38). It is important to report exempt LTCG to ensure transparency and proper compliance with tax regulations.
**d. Consequences of Non-Disclosure:**
- **Assessment Risks**: Non-disclosure of LTCG might raise issues during a tax audit or assessment, particularly if it impacts the computation of taxable income.
- **Future Scrutiny**: Discrepancies or omissions might lead to increased scrutiny in future assessments.
### **Steps to Take**
1. **Review Your Return**: Verify if the omission affects the tax liability. If the LTCG was exempt, it should not change your tax payable but needs to be correctly reported.
2. **File a Revised Return**:
- **For FY 2016-17**: You may not be able to file a revised return if the deadline has passed. In such cases, approach the Income Tax Department for rectification.
3. **Rectification Application**:
- **Section 154**: You can file a rectification application if the original return was processed and there is a mistake apparent on record.
4. **Consult a Tax Professional**: If you’re uncertain or face complications, consulting a tax advisor or professional is advisable to ensure compliance and address any issues.
### **Summary**
- **Penalties**: Penalties are more related to underpayment or misreporting, not just missing exempt disclosures.
- **Rectification**: Aim to rectify the return if possible, or seek advice from a tax professional.
- **Mandatory Reporting**: While LTCG on shares was exempt, proper reporting ensures compliance and transparency.
For precise and personalized advice, always consider consulting with a tax professional who can provide guidance based on your specific situation and the current regulatory environment.
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