(Photo: iStock)
(Photo: iStock)

Only super seniors, aged 80 or above, are eligible to file ITR in physical form

  • Section 54 does not impose any restriction on the taxpayer holding only one property
  • Option to invest LTCG in one property continues to remain available to the taxpayer

I am 72 years old. I would like to prepare and submit ITR-1 in physical form. However, I was told that from assessment year (AY) 2019-20, only super senior citizens (those aged 80 and above) are eligible to submit physical forms. Please clarify if I am eligible to make the submission in paper form.

— Name withheld on request

According to the amended provisions effective from AY 2019-20, the option to file tax returns in paper form is only available to individuals aged 80 years or more at any time during the relevant previous year. These super seniors have to furnish the returns in forms Sahaj (ITR-1) or Sugam (ITR-4).

Since you are 72 years old, you are not eligible to file your India tax returns in paper form. You will need to do the filing electronically instead.

I own three houses and intend to sell one of them and use the capital gains to buy a new property. Is there any clause which says that I should not possess more than one house in my name if I want to use the capital gains towards the new house? The new guidelines specify that exemption for reinvestment of long-term capital gains (LTCG) can be utilized once in a lifetime. Does this mean that I cannot benefit from reinvesting capital gains during subsequent years if I sell a property?

— Name withheld on request

As per Section 54 of the Income-tax Act, 1961, LTCG from the sale of a house property held for more than 24 months is exempt from tax if it is reinvested in one residential house property in India.

As per the amendment effective from financial year (2019-20, in addition to this, exemption is allowed even if such LTCG is reinvested in two properties in India, subject to LTCG not exceeding 2 crore. This option can, however, be exercised only once in a taxpayer’s lifetime. The option to invest LTCG in one property, however, continues to remain available to the taxpayer, irrespective of whether he has availed of the benefit of the newly amended provision or not. Accordingly, you would be eligible to claim exemption under Section 54 in future as well, subject to the underlying conditions being satisfied.

Also, Section 54 does not impose any restriction on the taxpayer holding only one property apart from the new house on the date of sale, so the house being your third property will not matter in this context.

Parizad Sirwalla is partner and head, global mobility services, tax, KPMG in India