Urgent income tax query

Tax queries 667 views 3 replies

rajan pandya

student

49 Points Joined August 2012

Dear Friends, i have a client whose residencial status is NRI for the f.y. 2012-13 & an oridinary resident for the 2013-14 .He earned 41,00,000 Rs. outside india he paid 85,000 rs tax paid outside india in 2012-13. He was working in Singapore. He arrived in india sept.2013, after that he started a new business in which he suffered loss of around 2,00,000/- Rs. He also have the housing loan form 2012-13. I intend to submit ITR for two years for 2012-13 and 2013-14. Please suggest me answers for follwing questions:

2012-13

1. Is this salary income taxable in india? Please explain why(relevant sections, notifications etc.)?

2. Which ITR form to be used? Where to download for efilling?

3. Whether his residencial home and housing loan should be disclosed in balance sheet?

2013-14

1. Whether his business losses will be carried foreward? This being a belated return.

Thanking you in advance Regards

Rajan Pandya

Replies (3)

Roshan Thomas

C.E.O

356 Points Joined November 2007

Since you have mentioned that he is an NRI - his foreign income is not taxable in India. See section 9 of IT Act. Therefore you need not file his return for 2012-13. As far as interest on housing loan is considered, you can file return in ITR-2. (form can be downloaded from incometaxindiaefiling.gov.in website) No need to show value of house property. Just show the payment of interest and claim loss to that extent.

In the second year he becomes a resident, therefore his foreign income will be taxable in India. His business loss cannot be carried forward since this is a belated return, however the depreciation loss can be carried forward. You will have to use ITR 4 in this case.

Also consider whether there is any income on house property to be offered for tax i.e is the house let out ? or vaccant ?

rajan pandya

student

49 Points Joined August 2012

Thank You Roshan Thomas Sir,

We want to show his opening balances like cash, bank etc. So we want to file ITR for 12-13. As in the itr we have to show the world wide income of the assessee.

We have downloaded java utility as suggested by you. When we show his Singapore Income, as above world wide income needs to be declared, we are getting tax payable.

Should i show his salary income in 2012-13 or not.?

Regarding House property income, it is self occupied during 2012-13 and 13-14. As suggested by you if we are not showing house property in B/s. Do we also not show housing loan in liablilites.

As you are saying show interest as paid , Can I show that income in the gross total income or not?

"Best regards"

Rajan Pandya

Vijay

senior Associate

28 Points Joined July 2013

Hi I have a Querry. A proprietor business has ceased to exist due to his demise. His legal Heir that is his son (NRI)does not intend to do business and plans to sell it. He has closed all statutory obligations and is planning to sell the business in milestone amounts to a party X..

My Question is

1 He would be able to file as a legal heir on behalf of his dad.

2 The Sale consideration since received over a period of 3 years- My question is that in the capacity as a legal heir, would he be able to keep the books of the company open until he receives all pending dues and file returns in the capacity as a legal heir- Untill he realizes the money?

3 How is the Sale proceeds taxed? - My understanding is that the excess amount received after settling all obligations, such as creditors, Sales Tax , Cenvat,Salaries outstanding, Unsecured loan and proprietor capital account would be taxed as Capital Gain? What if the amount is less or unrealized and to be written off. can the loss be carried forward to the legal heirs return?

4 Which Income Source the Legal heir in his Individual return report the above said proceeds.

Thank You