The capital gain arising from the sale of immovable property of a capital asset is subjected to tax. Capital Gain tax u/s 45 of the Income Tax Act is to be levied on the sale. However, Capital gains are of two types i.e long term and short term. The tax liability will differ depending upon the type of capital gain.
Taxpayers who receive an SMS or any communication via call or email from ITD are likely to face some verification issues in their ITRs. Taxpayers can receive the SMS for three reasons:
- Not filed ITR or The ITR is not filed in the given assessment year and has potential tax liability pending.
- Details provided by taxpayers and Information received to the ITD don’t match for that particular assessment year.
- Significant transactions get reported to the Income Tax department during a financial year which is considered abnormal or out of line with the profile of the taxpayer.
Taxpayers who have received any such verification issue needs to submit a response on those issues raised. The response has to be submitted online by logging into the compliance portal.
Verification issue in the computation of tax liability from Sale of Immovable Property
| Code | Description | Response |
| A1 | Total receipts as per taxpayer pertaining to the above information | Amount + Remarks |
| A2 | Value adopted or assessed for the purpose of payment of Stamp Duty | Amount + Remarks |
| A3 | The value is taken for computation of capital gains | Amount + Remarks |
| A4 | Less: Amount relating to another year/PAN | PAN year-wise list + Remarks |
| A5 | Less: Amount covered in other information | Amount + Remarks |
| A6 | Less: Exemption/Deduction/Expenditure/ Set off of Loss | Exemption/Deduction wise list + Remarks |
| A7 | Income/Gains/Loss (A1-A2-A3-A4) | Amount + Remarks |
A1- Total receipts as per the taxpayer pertaining to the above information.
The gross value of the receivables/received payments against the transfer of the property is to be mentioned.
A2- Value adopted or assessed for the purpose of payment of stamp duty
The amount of stamp duty paid or payable is to be mentioned here. If there is no stamp duty value then the field should be left blank. As per section 50C or 43CA, if the sale amount is lower than the value taken for payment of stamp duty is to be considered for computing income.
A3- Value taken for computation of Capital Gains.
The value that has been considered for the computation of income is to be mentioned. If value taken for payment of stamp duty is higher than the sale amount and it is claimed that the former value exceeds the fair market value, then appropriate remarks are to be stated under the remarks section.
A4- Amount relating to another year/PAN.
If part of the income/receipts relates to someone else’s PAN or is considered for some other year then the List of details of such income is to be mentioned as per the table below:
A5- Amount repeatedly covered:
If any amount is mistakenly covered twice then it should be mentioned under the Remarks section of the previous table. This will nullify the repeated Income/Gains/Loss covered.
A6- Exemption/Deduction/Expenditure/Set off of loss:
This section has to include a list of all the available allowances which are exempt. The taxpayer needs to select the correct category from the drop-down list as under:
- Agricultural Land outside specified limits
- Capital Gains:
- Cost of Acquisition u/s 48
- Cost of Improvement u/s 48
- Expenditure incurred wholly and exclusively in connection with transfer u/s 48
- Deductions from Capital Gains u/s 54/54B/54D/54EC/54EE/54F/54G/54GA/54GB
- Set off of Loss
- Others
The details are to be submitted as per the table mentioned below:
A7- Income/Gain/Loss:
This section includes the self-computation of income from house property chargeable to tax A5=(A1-(A2+A3+A4)). If your income computation exceeds the minimum of 2.5 lakh then you should file your ITR.
FAQs
Yes, it is advisable to log in to the compliance portal. If a taxpayer doesn’t log in he/she will not be able to respond to the issues raised.
Upon examining the online response submitted by the taxpayer, ITD can raise an additional query request to seek further information/clarification from the taxpayer. The taxpayer needs to respond to the additional query request as well.
If there are any e-Verification issues it will be pushed to the compliance portal for e-verification, Email and SMS will be sent to the taxpayer informing about the issue raised. Taxpayers then need to respond to those issues raised.