I am a senior citizen with taxable income of Rs 2.75 lakh per annum, mainly from interest income. I have also substantial holding of company shares and earn non taxable dividend income of about Rs 1.25 lakh per annum. I will be 80 years of age in the next financial year 2013-14 and will not have taxable income from that year. My queries are:
a) Do I need to submit income tax return from the financial year 2013-14, still having the tax free dividend income of 1.25 lakh per annum?
b) If I sell shares and earn long term capital gains, whether I will need to file return to show the sale of shares and earning of non taxable capital gains even though taxable income remains below the limit for financial year 2013-14
Asish Choudhuri, Calcutta
As you will be attaining the age of 80 in financial year 2013-14 with a taxable income from interest of Rs 2.25 lakh per annum and tax free dividend income of Rs 1.25 lakh per annum, under section 10(34) of the Income Tax Act, you are not required to file return of income as your gross total income before claiming deductions under section 10A, 10B, 10BA, 80C to 80U does not exceed the exempted amount of Rs 5 lakh applicable for super senior citizen.
As your long-term capital gains from the sale of company shares is exempt under section 10(38), and taking into consideration your income from interest, you will not have to file return of income under section 139(1) for 2013-14.
I am a very senior citizen. I hold three mutual fund schemes which I am planning to sell. As all three holdings are tax exempt from capital gains do I have to report them to tax authorities using return forms other than ITR 1?
K K Datta, Calcutta
As you are a very senior citizen having a total income from pension, interest on savings bank account and long term capital gain on sale of mutual fund, you are required to file return of income using form ITR-2 which is meant for individuals not having business/professional income. Filling of return of income, if your taxable income is above the exemption limit of Rs 5 lakh using ITR-2 is very simple and is similar to ITR-1 except one has to report under exempt income particulars, the amount of long-term capital gains on sale of mutual funds under section 10(38) of the Income Tax Act.
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