Income tax return (ITR) filing: This section of public does not have to pay tax

My annual income is Rs 1.5 lakh and if I get Rs 1 lakh short-term capital gains, then do I need to pay 15% tax or will it be exempted as my total income is Rs 2.5 lakh only (Rs 1.5 lakh + Rs 1 lakh). Please clarify. - Ramana

Only the income from sale of equity share, unit of equity oriented fund or unit of business trust shall be charged to tax as a short term capital gains @15% if security transaction tax was paid on such sale. The benefit of basic exemption limit has been allowed to be claimed against such a short term capital gains arising to a resident tax payer. Thus, if the total income of a resident taxpayer is less than the basic exemption limit, such a taxpayer is allowed to reduce from its short term capital gains, the balance amount of basic exemption limit as remained unutilised after reducing the total income. Therefore, considering you as a resident taxpayer, the basic exemption limit would be first adjusted against your annual income of Rs 1.5 lakh. The balance of Rs 1,00,000 (that is Rs 2,50,000- Rs 1,50,000) will be adjusted towards the short term capital gain, thus, resulting into 'Nil' income.

I am an architect and working on my own. Till last year I was working with a real estate firm and was getting a salary. Is there a separate ITR form for professionals that I will need to use this year? Will I have to pay advance tax? - Shailaja Kumar

Professional receipts are disclosed and taxed under the head "Profit and gains of Business or Profession"and different ITR forms are prescribed for the same. As per the Income Tax Act, the taxpayer is given an option to pay tax on the professional receipts on presumptive basis at a specified rate if his gross professional receipts are less than Rs 50,00,000. Thus, based on the scheme opted; the said income is required to be reported in two different forms. ITR 4 is used if presumptive taxation is opted otherwise ITR 3. Further, if your estimated income tax liability exceeds Rs. 10,000, then you shall be required to pay advance tax.

By, Chirag Nangia
(The writer is Director, Nangia Advisors LLP)