Tax queries answered by Dilip Lakhani, Senior Chartered Accountant

I am a housewife and never filed income tax (I-T) return in the past as I did not have any income. Two months back, I received some money from my mother-in-law and invested the amount in equity mutual funds. I am not planning to sell the units before 3 years. Do I need to file the I-T return next year as I have invested in mutual funds even though I have no other income? If I have to, how do I file the return?
Nupur Biswas
If your income is nil or below the basic exemption limit, you are not required to file I-T return. Just because you have invested in mutual funds, you are not required to file return of income.

I am currently living and working in Haryana but I come from Kerala. I have my own house in Haryana and recently started constructing a house in Kerala with a home loan. I want to sell the property in Haryana and complete my house in Kerala and also clear the bank loan.What will be the tax liability while selling the house in Haryana?
KPS Narayanan
You will be liable to pay capital gains tax arising on sale of house in Haryana. If the house in Haryana is held for 3 years or more, the capital gains will be long-term capital gains with indexation benefit. You will be eligible to claim exemption under section 54 of I-T Act, 1961 in respect of the amount invested for constructing the house in Kerala, subject to fulfillment of conditions laid down in the said section. The construction of the house has to be completed in 3 years from the date of transfer of house in Haryana.

You will have to invest at least the amount of capital gains for the construction of the house in Kerala. The net long-term capital gains will be chargeable to tax at 20%. If the house in Haryana is held for less than 3 years, exemption under section 54 will not be available and the capital gains will be short-term capital gains chargeable to tax at 30% without indexation benefit.

I have an income tax HUF file, which I would like to close. In what proportion should I distribute the assets and liabilities of the HUF to members/Karta?
Rameshwar Jajoo
All the members of Hindu Undivided Family (HUF) have equal rights in the property of HUF. However, on total partition of the HUF, the assets and liabilities of the HUF may be distributed in the mutually agreeable manner between the Karta and the members. Any sum received by an individual as a member of HUF on the complete partition of the HUF will be exempted in the hands of the individual. Unequal distribution will not trigger any tax incidence in the hands of the members.

(Please send your queries on Tax to et.tax@timesgroup.com)