Readers' corner: Tax

Within my salary bank account, there’s also a reimbursement account. When filing my tax return do I need to provide details of the reimbursement account as a separate bank account or just mentioning my primary bank account will suffice?

It is clearly stated in the instructions issued by the department to file a return, details of all savings and current accounts held by you at any time during the year are required to be reported. However, it is not mandatory to provide details of dormant accounts which are not operational for more than three years.

The account number should be as per Core Banking Solution (CBS) system of the bank and hence, in your case, considering the reimbursement account is within your primary salary account, it may not have a separate account number. If this is the case, you may disclose your primary salary bank account only.  

I trade in shares. There’s no particular strategy I follow. I take delivery for long-term investments and also do intra-day sometimes. Which ITR Form should I use to file my returns?

Before you decide which form to be filled, it is essential to determine what is the nature of income. You are trading in shares to make investments and also doing day trading.  Accordingly, your income can be classified as ‘business income’ or ‘capital gains’. According to Circular No 4/2007 and 6/2016 wherein it was clarified any purchase or sale of shares with a motive to earn profit would be considered as business income and if the objective is to derive dividend income, it will tantamount to capital gains. It is at the option and discretion of the taxpayer to determine the nature of income and the same approach needs to be followed every year. 

Accordingly, you need to analyse your situation considering the above aspects and decide about the nature of income. If you choose, to show gains as income from business, then you need to use form ITR 3. Otherwise, you need to use ITR 2. 

Last financial year, I received some gold as a gift from vendors . I am salaried. How do I declare this?

Gift from close relatives is exempt. However, the entire amount of gift received from a person other than specified relative is taxable if it exceeds Rs 50,000. In your case, the gift received from vendors is taxable in your hands and hence, should be disclosed as ‘income from other sources’ and you should pay taxes due before filing the return of income.

The writer is partner and leader, personal tax, PwC India. The views expressed are the expert’s own. Send your queries to yourmoney@bsmail.in