Income Tax: Capital gains on transfer of debt-oriented mutual funds are taxable

Feb 11 2014, 09:43 IST
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SummaryHowever, units of mutual funds cannot be considered as shares of a company.

I had filed my return of income for FY13 in October 2013. I treated profits from share trading as business income rather than capital gain. Now I wish to revise the return by showing them as capital gain. Can I do so?

— Suraj Kumar Singh

As per Section 139(5) of the Income-Tax Act, a person is permitted to file a revised return of income if he has filed the original one within the prescribed due date. For FY13, the due date of filing return of income was July 31, 2013 (which was later extended to August 5, 2013). As you filed your return of income in October 2013, i.e., after the due date, you can’t file a revised return.

Last week, I sold a flat that I bought in 1999. I am planning to buy a new flat in the name of my daughter (who is married) from the sale proceeds. Can I claim capital gain exemption?

— Prakash Mahindroo

Under Section 54 of the Income-Tax Act, an individual can claim capital gain exemption if he purchases a residential house within the prescribed time-limit by utilising the amount of capital gain arising on sale of a residential house. Since you are planning to purchase a residential house in the name of your married daughter, you will not be eligible to capital gain exemption.

If you purchase the new house property in joint ownership with your daughter, then you may be able to claim the exemption based on certain court rulings.

The writer is founder of RSM Astute Consulting Group

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