I received a demand notice for income tax filed for assessment year 2023-24 due to a tax credit mismatch. It claimed that I hadn’t accounted for all the receipts listed in my Form 26AS. The mismatch was due to a system error that had counted a house property sale receipt three times due to a transaction reversal. Is there a platform to bring this discrepancy to the attention of the tax department?

Amit Maheshwari, Partner, AKM Global:

We understand that you have received the demand notice under Section 156 of the Income-tax Act, which appears to have been issued erroneously by the tax department due to multiple transactions. To address this issue, you can submit a rectification request via the income-tax portal, in accordance with Section 154 of the Act. This can be done within four years of the end of the financial year in which the order sought to be rectified was passed. You also need clarity regarding the forums where you can escalate the matter. To ensure effective resolution, we recommend resending e-mails to the jurisdictional tax officer’s e-mail address, outlining the issues comprehensively and providing appropriate documentation. You can get the e-mail ID of the respective tax department official by logging into the efiling portal and checking the jurisdiction details. You also have the option to register your grievance through the tax portal. Seeking professional assistance is advisable to ensure proper resolution through appropriate channels.

I recently sold two residential properties to finance the purchase of another property. I still own one property. Am I eligible for capital gains tax exemption by reinvesting in another residential property?

Shubham Agrawal, Senior Taxation Adviser, TaxFile.in: Section 54 of the Income-tax Act, 1961, does not prohibit the sale of two residential properties and purchase of a single property to save capital gains tax. Hence, you can reinvest the capital gains derived from the sale of two houses in one house. Since the Income-tax Act is silent on this, there are various ITAT judgements to support this view as well. Under Section 54, you can reinvest the gains from a residential property in another residential property, irrespective of the number of houses you own on the date of sale of the residence in question. There is, however, a restriction on the number of houses you own on the date of sale of assets, but that is under Section 54F. You shall be availing of Section 54, not Section 54F.

My health insurance provider offers a discount on a three-year, lump-sum premium payment. If I pay a combined premium, can I claim tax deduction under Section 80D over three years? My three-year premium is nearly Rs 1.5 lakh, so as a senior citizen, I am eligible to claim Rs 50,000 deduction annually. How can I claim this for three years? I asked my insurer for a tax certificate covering three years, but it refused.

Sarbvir Singh, Joint Group CEO, PB Fintech:

Under Section 80D, taxpayers can avail of tax deduction on healthcare-related expenses, including premiums for medical insurance, over a span of three years. If an individual pays a lumpsum premium of `60,000 for a three-year tenure, he can claim tax deduction of Rs 20,000 each year. For senior citizens aged 60 years or above paying a lump-sum premium of `1.5 lakh, the deduction limit is `50,000 annually. Regardless of whether the insurer issues a single receipt or one that is spanning three years, you have the flexibility to claim deduction in a single year or spread it over two or three years. As a senior citizen, it’s good to have the foresight to buy a multi-year health insurance plan, but it is advisable to connect with a financial adviser. He can not only help facilitate claiming the premium for the next two to three years, but also assist you with the necessary documentation and formalities.

I own a residential property jointly with my wife. My share is 30% and my wife owns 70%. We are both joint borrowers for the home loan and pay the EMI from a joint account. I want to opt for the new tax regime. Is it possible for my wife to claim the entire interest and principal amount for tax purposes in the old tax regime? My employer is also ready to give a certificate for this purpose after accepting my no-claim undertaking for the new tax regime. Please advise.

Shubham Agrawal, Senior Taxation Adviser, TaxFile.in:

The home loan interest should be claimed in the ratio of ownership. The basis for the same is the home loan interest certificate provided by the bank. The ratio of ownership is not mentioned anywhere, but it is determined as per the capital contribution by co-owners. It won’t be ideal for your wife to claim it fully unless you have already serviced the house cost up to 30%, and she is paying the EMIs fully from her capital. Even in the new regime, you can claim home loan interest paid if the house is rented. The interest claim for self-occupied property is capped at Rs 2 lakh per coowner. So, hypothetically, even if you were to claim your interest in her income tax return, the benefit would be capped at Rs 2 lakh.

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