How are bond investments reported in ITR?

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

– Dilip Saksena

It is assumed that you have supplied a flat which was held for a interval exceeding 24 months and due to this fact the helpful properties from the an identical would qualify as long-term capital helpful properties (LTCG). Further, it is assumed that you have already invested such LTCG in REC bonds, as specified by Section 54EC of the Income-tax Act, 1961 and all the alternative prescribed conditions (to avail the benefit of exemption) have been fulfilled.

An explicit individual taxpayer having earnings beneath the capital helpful properties and by no means having earnings beneath the head ‘Profits or Gains from Business or Profession’ (PGBP), is required to file tax return in Form 2.

For the goal of your query, it is assumed that you simply simply should not have any earnings beneath PGBP.

The Income-tax Department has already notified Form ITR 2 for the fiscal yr 2023 (i.e., analysis yr 2023-24). In the acknowledged variety, LTCG might be required to be reported beneath associated schedules as below:

Schedule CG: Capital Gains:

Part-B, serial no. 1: This half covers reporting of LTCG from sale of land and / or setting up. Details regarding the date of sale and purchase, sale consideration, stamp value, exact and listed worth of acquisition, worth of enchancment, change payments, exemption claimed beneath half 54/54B/54EC/54F/54GB of the Act, and so forth. are required to be reported beneath respective fields.

Part-D, serial no. 1: This half covers reporting of any deduction claimed beneath half 54/54B/54EC/54F/54GB of the Act. Details of exemption claimed beneath half 54EC is required to be reported beneath merchandise amount ‘c’, which contains reporting of date of change, date of investments in bonds and amount of funding, and so forth.

Part F: In case after claiming eligible exemptions, if there could also be any taxable amount of LTCG, the small print about accrual/receipt of such capital obtain might be required to be reported beneath Part F, serial no. 6.

Schedule Tax Payments:

In case tax has been deducted at provide from the sale consideration by the consumer of the property, then relevant reporting of such TDS might be required to be carried out in serial no. C1 of the tax payment schedule. Details of such amount shall be accessible in Form 26AS / Form 16B, as issued by the consumer.

In addition to the above, the funding in bonds might be required to be reported beneath Schedule AL – Assets and Liabilities, if related.

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

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