My father is a doctor and he had invested in shares over a period of2 years in 2013-2015 (50 lacs) with his tax paid salary income .He had filled tax returns in those years but not disclosed his investment in shares in tax returns as his auditor told him not necessary to disclose because its an investment.Now my father wants to sell those share in April as he is in profits and no longterm capital gains and he wants to repay the housing loan (70 lacs) taken by mother under HUF category .Now he is having doubt whether his investment in shares comes under undisclosed income or PMGKY compliant and worrying . He is loosing peace of mind please clarify this doubt and what to do if he sells his investments in April .when should he has to show his selling in investments.What kind of tax returns he has to file and when if he sells in April.Will there be any problem.He was a government professor in medical college retired and now working part time in a private medical college for a monthly salary of rs50000/-and his pension is rs50000/- per month.
Does he have to file revised returns or regular returns showing the sale in investment in 2017-2018 .please guide us
Dear Sir,
No need to worry about it.
Your auditor was right. He was not required to disclose the investment in shares but when you sale those shares, you have to show it in ITR for that year.
Don't worry if the investment is out of tax paid salary income then it's not an undisclosed income.
Capital gain is exempt on STT paid long term equity shares .
Please feel free to call/ revert in case of any doubts
Thanks and Regards
Abhishek Dugar
CA CS B.com
Dear sir,
The investment in shares in not considered as undisclosed income since it is acquired out of legal disclosed source. ITR 2 need to be filed.
Hi,
Your father need not to worry about it. and his CA advised him correctly.there is no need to revise previous years return.
As money in shares was invested out of tax paid income, it does not amount to undisclosed income.
As your father is planning to sell shares after holding them for more then 1 year (assuming shares are traded in stock exchange) then it is Long term capital gain and if STT has been on these shares then sale proceeds from these shares is exempt from tax, though he is required to disclose this income in his return while filing the return of FY 2017-18.
Hello Sir,
Since he was a salaried employee it was necessary for him to show his investments. So you need not worry about undisclosed income.
But yes he has to show the capital gains in the year of sale and pay the respective tax if any.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
As your father invested in the shares out of his tax paid income, there is no need to disclose them in the year of investment. However, the profits on sale of such investments need to be disclosed in the IT return, in the year in which such sale takes place.
As his present income is about Rs 1 L p.m., he needs to file his IT Returns.
1. No in case of salaried person there is no need or no provision to declare the investment in shares.
Sir be least assured that it will not come under undisclosed income. No need to worry. You can sell the shares and since it is long term gain you need not pay any tax. The amount can be invested to close the housing loan. In the year of sale of shares you need to file return declaring the capital gains received.
