I received Rs. 50,000 as dividend during FY 2021-22. In one instance, a tax of Rs. 600 was deducted. That said, my income, including dividend, is less than Rs. 2.5 lakh. Do I still need to file my income tax return? How do I avoid deduction of tax at source (TDS) on dividend in future as I am unlikely to have any tax liability in future also?
According to the income tax provisions, an individual is required to file his/her income tax return (ITR) if he/she satisfies one of the certain conditions as specified under the Income Tax Act, 1961. One of these conditions is that you have to file your ITR if the aggregate of all your taxable income, before various deductions, exceeds the basic exemption applicable to you.
This basic exemption limit is Rs. 2.50 lakh for those who are below 60 years of age. For those who are over 60, but below 80 years, this limit is Rs 3 lakh, while for those over 80 years, it is Rs. 5 lakh.
However, there is no restrictions on you voluntarily filing your ITR. Where tax has been deducted from your income, and your income does not exceed the basic exemption limit, you have to file your ITR to claim refund of TDS.
Since your income does not exceed the basic exemption limit, you are not required to file your ITR mandatorily, but in case you wish to claim refund of the TDS from your dividend income, then you will have to file your ITR.
Since you are unlikely to have any tax liability in future, you can submit form no. 15 G to the company, where you hold the shares, to pay you dividend without deduction of tax at source, in case the dividend for the entire year is likely to exceed Rs 5,000. In case you are over 60 years of age, you have to furnish form 15H. Do note that you have to submit these forms each year, if you do not wish tax to be deducted at source.
My father has gifted me Rs. 5 lakh in FY 2021-22. Do I have to show this amount in my income tax return (ITR)? If so, where do I mention it in the ITR?
According to Section 56(2)(x) of the Income Tax Act, 1961, the recipient of a gift has to pay tax in case the aggregate of all gifts received by him/her from all the sources exceeds Rs. 50,000 in a year.
That said, certain gifts, received from specified relatives are outside the scope of this provision, and are not treated as income. The relationship of parent and child comes under this scope. So, the gift of Rs. 5 lakh received from your father will not be considered as income, and therefore, you will not be required to disclose it in your income tax return. However, if you still wish to disclose it, you can show it under the schedule Exempt Income.
The author is a tax and investment expert.
(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)
