How are bond investments reported in ITR?

In FY 2022-23, I offered a flat and invested a taxable portion after indexation in bonds of Rural Electrification Company Ltd (REC) for a interval of 5 years. How do I present this bond funding in my revenue tax return (ITR)?

– Dilip Saksena

It’s assumed that you’ve got offered a flat which was held for a interval exceeding 24 months and therefore the features from the identical would qualify as long-term capital features (LTCG). Additional, it’s assumed that you’ve got already invested such LTCG in REC bonds, as specified by Part 54EC of the Revenue-tax Act, 1961 and all the opposite prescribed circumstances (to avail the good thing about exemption) have been fulfilled.

A person taxpayer having revenue below the capital features and never having revenue below the pinnacle ‘Income or Good points from Enterprise or Occupation’ (PGBP), is required to file tax return in Type 2.

For the aim of your question, it’s assumed that you simply shouldn’t have any revenue below PGBP.

The Revenue-tax Division has already notified Type ITR 2 for the fiscal yr 2023 (i.e., evaluation yr 2023-24). Within the mentioned type, LTCG can be required to be reported below related schedules as beneath:

Schedule CG: Capital Good points:

Half-B, serial no. 1: This half covers reporting of LTCG from sale of land and / or constructing. Particulars concerning the date of sale and buy, sale consideration, stamp worth, precise and listed value of acquisition, value of enchancment, switch bills, exemption claimed below part 54/54B/54EC/54F/54GB of the Act, and so on. are required to be reported below respective fields.

Half-D, serial no. 1: This half covers reporting of any deduction claimed below part 54/54B/54EC/54F/54GB of the Act. Particulars of exemption claimed below part 54EC is required to be reported below merchandise quantity ‘c’, which incorporates reporting of date of switch, date of investments in bonds and quantity of funding, and so on.

Half F: In case after claiming eligible exemptions, if there may be any taxable quantity of LTCG, the details about accrual/receipt of such capital achieve can be required to be reported below Half F, serial no. 6.

Schedule Tax Funds:

In case tax has been deducted at supply from the sale consideration by the client of the property, then acceptable reporting of such TDS can be required to be carried out in serial no. C1 of the tax fee schedule. Particulars of such quantity shall be accessible in Type 26AS / Type 16B, as issued by the client.

Along with the above, the funding in bonds can be required to be reported below Schedule AL – Belongings and Liabilities, if relevant.

Parizad Sirwalla is companion and head, world mobility providers, tax, KPMG in India.

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