If I book a flat in Pune in October-2015 by paying booking cost, registration and cost of initial construction and sell my house in May-June 2016, can I utilize portion of my LTCG in off setting the payments done earlier?
If the new flat is handed over by August-2018, can I utilize my LTCG till allotment of flat by opening Capital Gain A/c in the bank?
If my LTCG deposited in bank is exhausted prior to allotment of flat, can
I close my Capital Gain A/c earlier? [nirmala.v.deshmukh@gmail.com]

Opinion:
Long Term Capital Gain (LTCG) arising on sale of a residential house property could be claimed as exempt u/s 54 of the Income Tax Act-1961. To claim an exemption u/s 54, taxpayers have to invest LTCG in purchase/construction of another house property within a prescribed time frame. The prescribed time periods are as under:
a] For purchase:
One year before or two years after the date of sale.
b] For Constructions:
Three years from the date of sale.
In your specific case, you intend to sale your existing house by May-2016 or so. To claim exemption against the LTCG arising therefrom, you can purchase the flat in between May-2015 to May-2018. Registration / handing over of flat to you in August-2018 may debar you from claiming an exemption u/s 54. Even investment done in between October-2015 to May-2016 would be eligible for exemption u/s 54 provided that the transaction of purchase is completed within a period of 2 years (i.e., Before May-2018). Though unutilized LTCG can be kept in Capital gain deposit account scheme, for closure you would be required to obtain the letter from your assessing officer. Needless to say, non compliance with the stipulations of section 54 (i.e., purchase before May-2018) would restrict your assessing officer from issue of letter for capital gain account closure & would result in treating earlier sought exemption as LTCG of the year of account closure. Assessing Officer would issue the letter only if you complete the transactions of purchase within prescribed time frame. So far, the income tax department was not having much thorough grip over the utilization of funds from capital gain deposit account scheme. However, newly notified ITR forms for the current years contain columns which require compulsory reporting of the inflow and outflow of the funds from capital gain account scheme.
[Note: In some judicial pronouncements, exemption is granted to the taxpayer even if the purchase of the house property is not completed within a period of 2 years provided that full payment of LTCG amount towards purchase is made. To be on a safer footing, complete the transactions of purchase within a period of 2 years as mentioned above].

Query 2]
I have got my PAN CARD in my maiden name and surname and my maiden signature. That PAN CARD is been used since last so many years in Bank a/c, Demat A/c, Fixed deposit etc and is still required. But now after marriage, I require PAN CARD in my married name and surname and new after marriage signature. I know that the original PAN card can be changed in the married name, but what will be the position when the original PAN CARD will be required with the original signature in maiden name? Kindly enlighten me in this matter in your esteemed column in Hitavada. Whether it is permissible and legal to use two PAN CARDS, of course with the same number, at the same time with two different signatures? If not, then what is the way out? [Mrs. Meenal Manish Rajdev- meenalrajdeo10@gmail.com]
Opinion:
Permanent account number or PAN not only serves the purpose of identity but also have multiple uses at varied occasions like opening bank account, De-mat accounts, Purchasing Properties, investments and many others. However every person should have only one PAN in his name and having multiple PAN is an offence and might result in legal notice from the government and may be subject to a penalty of Rs. 10,000/-. It is illegal to have multiple or more than one PAN. Taxpayer having additional PAN should surrender it instantly.

You can get the data in the PAN card changed with new middle name, surname, photograph & signature incorporated therein. For this, you have to make an application in “Request for New PAN Card or/and Changes or Correction in PAN data”. You have to attach the documents in support of your submission. The form can be downloaded from the websites of UTI Technology Services Ltd (UTITSL), National Securities Depository Ltd (NSDL), or the I-T department [www.utitsl.co.in, www.tin-nsdl.com or www.incometaxindia.gov.in].

In your specific case, you would be having only one PAN. Only PAN Card would be two- one with the old name and second one with the new name. As both would be having the same number, there would not be violation of law. PAN with earlier name may be used by you restrictively wherever needed & since the number is same, it won’t attract any penal consequences.

Query 3]
I retired as Executive Engineer from Chandrapur STPS in August-2012 and was paid my salary during service period and retirement dues on different instances during FY 2012-13 (AY 2013-14).The TDS details for the same year are as follows.

Salary-April to Aug.2012- Rs. 25,000/-
DA arrears, GO III arrears, Leave Encashment- Rs. 1, 97,944/-
Gratuity- Rs. 82,801/-

Total – Rs. 3, 05,745
Thus, the tax deducted is Rs. 3,05,745/- whereas the amount posted in IT department account is Rs. 2,22,944/-. As such, I have been issued a demand notice for Rs. 1, 00,820/- which includes interest on the amount of tax due. Hence, I request you to kindly guide me what I should do to save me from paying such a huge amount due to no fault from my side? [rrdiwakar@rediffmail.com]
Opinion:
Lot many taxpayers are received outstanding tax demand notices now a day due to mismatch in their TDS data. In your case, though the TDS of Rs. 3,05,745/- has been done by your employer whereas only Rs. 2,22,944/- is reflected in your account. The reason is obvious. The employer has not correctly filed the TDS return. You may take up the issue with your employer by writing a letter elaborating the amount of TDS done by them and the amount reflected in your record. You should duly keep the acknowledged copy of the letter given. If the issue is not resolved within reasonable time, you may approach Joint Commissioner or Addl. CIT of TDS wing who has jurisdiction over the employer with a request letter to along with the acknowledged copy of your earlier communication with your employer. Deductee may further note that their TDS claim cannot be denied in such cases by virtue of Instructions No. 275/29/2014-IT-(B), dtd.1-6-2015 issued by the CBDT.

Query 4]
I want to know the following:
I have two form No. 16 in the financial year 2014-15. One is from Apr-2014 to May-2014 & another one is from June-14 to Mar-15, as I changed my company in last year May-2014. I would like to know as to how do submit ITR (by clubbing or one by one)? [V Yugandhar, Jabalpur- yugandhar.1832@gmail.com]
Opinion:
One person can file one ITR for one year wherein all the income are required to be incorporated. You have to aggregate both the salary income and then would be required to file return of income.

[The author is a practicing Chartered Accountant from Nagpur.
Readers may send their direct tax related queries at
SSRPN & Co
10, Laxmi Vyankatesh Apartment
C.A. Road, Telephone Exch. Square
Nagpur-440008
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