Tax advice

Use permanent address for filing I-T return

Q. Please clarify on the query by Amit Kumar published in these columns on February 3, 2020 regarding the shifting of taxpayer’s place of employment. Till last year, my permanent address was Bathinda, but now I have settled in Amritsar permanently. My queries are as under:

(1) If I apply for obtaining a new PAN with Amritsar address, will it require transfer of Jurisdiction Assessment Officer (JAO) as well? How do I proceed for the changes? Should I apply for the transfer of JAO and new PAN will follow automatically?

(2) If I continue to file my ITR with the old address, will there be any violation of law? Please advise.

– Krishan Dev Uppal

A. It was pointed out in the reply to query of Amit Kumar that the income-tax return has to be filed on the basis of permanent address. This proposition would hold in your case also. You have to, therefore, take the following steps to enable you to file the income-tax return on the basis of your permanent address which I presume is Amritsar.

(a) In the first instance, you have to get your PAN data changed wherein your new permanent address will be inserted for this, PAN correction form needs to be filed.

(b) After the PAN data is amended, you have to write to the Commissioner of Income-tax, Bathinda, to transfer your files and migrate the PAN to Jurisdictional Commissioner at Amritsar. This request would also mention that your PAN data has been changed wherein new permanent address has been inserted and relevant proof thereof shall accompany such request.

(c) You will also have to write to the Commissioner of Income-tax at Amritsar informing him that you have shifted from Bathinda to Amritsar for good and your permanent address at Amritsar has been incorporated in the PAN data. The relevant proof in this regard should be attached along with this request.

(d) After making this application for transfer of files, you can file your income-tax return with the Jurisdictional Officer at Amritsar.

Q. In the ITR for the AY 2019-20 filed online, I had claimed a deduction of Rs 1,25,000 u/s 80 U being severely disabled (90% locomotor disability). However, benefit of only Rs 75,000 (applicable to normal non-severe disability) has been considered being the pre-filled figure. My efforts made on PG portals have fetched only negative result. Similar was the position in respect of ITR for the AY 2018-19. Please advise me how to get the benefit of the higher deduction of Rs 1,25,000.

– Manjit Singh

A. You should make an application under Section 154 of the Income-tax Act, 1961 (The Act) requesting the officer to rectify this mistake which is apparent from the records. In case the rectification is rejected, you can file an appeal against such an order. You may also file a regular appeal for not allowing you a benefit allowable on account of severe disability under Section 80U of the Income-tax Act, 1961 (The Act) without assigning any reasons. Such an appeal will have to be accompanied by a request to condone the delay in filing the appeal. This is being suggested on the presumption that 30 days have expired from the date of receipt of the intimation under Section 143(1) of the Act from the Income Tax Department.

Q. I sold a house more than two years ago. The sale proceeds are lying in capital gain account in the bank. I want to construct a house by purchasing a plot. Can I invest the amount of capital gain in purchasing the plot and constructing a house thereon?

2) I have another plot which was allotted to me long time ago. Can I invest this amount of capital gain for the construction of house on this old plot as well?

– RK Singh

A. Your queries are replied hereunder:

(i) You are required to utilise the amount of capital gain for constructing a residential house within a period of three years from the date of sale of house so as to claim the exemption from leviability of income tax on the capital gain arising on the sale of the house. The amount of capital gain cannot be utilised for the purchase of plot only as in such a case exemption under Section 54 of the Act would not be admissible.

(ii) It would, therefore, be advisable for you to construct a residential house on the plot which is already held by you so that the construction is completed within a period of three years from the date of sale of the residential house. The amount lying in capital gain account will have to be utilised for the construction of the residential house within the period specified above.