Readers' Corner: Taxation

Kuldip Kumar
After filing my returns for the current assessment year, I got a refund of  Rs 28,090. There was some issue and I had to revise my returns. Now it shows another refund of Rs 9,770. Will I get this money or will it be adjusted in my next filing? 

From your query, it appears that based on your original return, you already got the refund of Rs 28,090. However, you found some error and revised your tax return and claimed another refund of Rs 9,770. If this be the case, you will get this refund once your revised return is processed by the tax authorities and they find your claim to be legitimate. Your refund will not be adjusted in next filing.

What is the taxation of cryptocurrencies. I made a profit of Rs 4 lakh on selling my investments. Do I need to pay tax on this? How do I calculate the tax for holding period of over three years? 

There is no specific provision in the income tax laws for the taxation of crypto currencies. Considering if one invested in the crypto currencies, the same may be considered as an investment and in view of the wide definition of capital assets under Section 2(14) of the Income-Tax Act, 1961, cryptocurrencies can be treated as a capital asset and any gains arising on the transfer thereof would be treated as capital gains. The gain would be long term where the period of holding for the cryptocurrency over 36 months and as such would attract a concessional tax rate of 20 per cent with an indexation benefit. On the other hand, where the holding period is less than 36 months, the gain would be subject to tax at applicable slab rate. However, where you are in the business of trading in cryptocurrencies, the profit thereof may be treated as an income from business or profession. One really needs to go into deeper analysis to frame the view. 

Can I invest in public provident fund more than the prescribed limit under Section 80C? I am interested in the higher interest it fetches. 

The annual investment in PPF account is capped at Rs 150,000. The deduction available u/s 80C is also restricted to Rs 150,000. Your spouse can also open the PPF account and deposit upto Rs 150,000 into it. 

I am working for a bank. My employer permits a limit of Rs 35,000 for housing. I pay Rs 20,000 from my own pocket as my rent is Rs 55,000. Who should deduct tax for the house owner – will it be me or my bank? The rent agreement is in my name. Can you also explain the procedure to follow? 

From the reading of the facts of the query, it seems that the rent agreement for the entire Rs 55,000 per month is in your name only. As per Section 194IB of the Income Tax Act, 1961, ("Act"), any person responsible for paying to a resident any income by way of rent exceeding  Rs 50,000 for a month or part of month is required to deduct tax. Since you are responsible for paying the entire amount, it may be construed that you should deduct taxes under this section. The bank is not a party to the agreement and acting merely as a facilitator/ intermediary for making this payment on your behalf and under your instructions. Since the ultimate responsibility of paying Rs 55,000 per month lies in your hands only, it cannot be held that bank is responsible for deduction of taxes. The tax is required to be deducted once at the end of the financial year or in the last month of the tenancy, as the case may be. The deducted tax needs to be deposited with the authorities within 30 days from end of the month in which such deduction is made. The same may be deposited electronically by filing the challan-cum-statement in Form No. 26QC wherein the details of the landlord, tenant and rent have to be provided. After deposit of the amount, you would be able to download Form No. 16C (certificate of deduction), from the online portal and hand over the same to your landlord within 15 days of submitting Form 26QC.
The writer is partner and leader-personal tax, PwC India. The views expressed are the expert’s own. Send your queries to

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