The buy-back pension is tax exempt

Do I have to complete Schedule HP even though there is no income or loss to report for owning my home? When filling in the HP Annex in ITR-3, I get the following error: “The property of the house is selected as the property of the condominium house, but the appraised share and the share of the or co-owner (s) ”is not equal to 100%. Please check the details of the co-ownership and make sure the co-owner’s share and your share are 100%. I only entered the property details and the co-owner details as well as the share percentage. Income, interest, however, is zero.

—Arun

We have assumed that this property is located in India. In accordance with the instructions issued for filing Form ITR-3 for the 2020-21 fiscal year, details of each property you own or co-own during the year should be reported in the HP Schedule under the heading “Ownership. of the House “.

When the property is co-owned, your percentage of ownership and the respective name, PAN and percentage of ownership of all other co-owners must be reported. The total ownership percentages of all co-owners (including yours) must be 100%. As a result, regarding the error you are facing, please make sure to complete the HP Annex with all the details mentioned above and ensure that the total of all ownership percentages equals 100 %.

I had initiated a phased retirement policy with ICICI Prudential Insurance Company in 2008 by paying ??1 lakh of premium for 10 years. The policy expired in 2018, but I did not acquire the value of the fund at that time due to my uncertainty about the tax implications. Under the terms of the policy document, I can get 1/3 of the fund’s value tax-free in my funds and the rest must be invested in an annuity policy, which currently offers low returns. What is the tax impact if I now invest the entire value of the fund in cash in my hands? If there are tax obligations, only the appreciation of the fund beyond my ??Is the 10 lakh contribution with indexation taxable? What is the amount of tax to be collected?

—RK Bhattacharya

We assume from the facts on the condition that the life stage retirement policy you have with ICICI Prudential Insurance Company is in the nature of a private retirement policy and not a life insurance policy. . We have assumed that the fund set up by ICICI Prudential Insurance Company falls under a pension scheme approved by the Insurance Regulatory and Development Authority of India (Irdai) for the purpose of receiving a pension.

In accordance with the provisions of the Income Tax Act, any payment received in pension commutation received from an approved fund (not under an employer’s scheme) is fully tax exempt.

Therefore, if you offer to convert the full value of the fund to cash now, the entire amount you received should be tax-exempt in your hands. However, this is subject to the eligibility of such higher switching under the terms of the policy.

Parizad Sirwalla is Partner and Head, Global Mobility Services, Tax, KPMG India.

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