YOUR QUERIES: ‘Prepayment of home loan does not entail any specific benefits’

Chirag Nangia

I work in Dubai but I invest in stock market through Upstox with my India account. Will there be any problem due to my source of investment?
—Vikas Yadav

As per Reserve Bank of India (RBI) guidelines, an NRI who wishes to invest in shares in India via a stock exchange needs to approach the designated branch of any dealer (bank) authorised by RBI to administer Portfolio Investment Scheme (PIS) to open a NRE (Non Resident External) /NRO (Non Resident Ordinary) account under it for routing investments.

I filed my returns for AY2020-21. However, I did not enter details of my short term/long term capital gains in equities and mutual funds as it was negative. (a) Do I have to submit revised returns indicating these? (b) What is Pass Through Income (PTI) while filing ITR-2. (c) I sold a house and deposited LTCG in a Capital Gains Account Scheme with SBI and declar-ed in ITR-2. Do I have to show indexed cost value as income?

—M R Bhardwaj

(a) The ITR has to be submitted giving details of income from all sources. The gain/ loss from capital gain should have been reported. You may revise the return to include the entries you missed.
(b) In the PTI schedule of ITR 2, details of PTI from business trust or investment fund as per Sections 115UA or 115UB have to be reported. These incomes, passed on to unit holders, are taxed in the hands of the unit holders directly.
( c ) While computing LTCG from sale of property, indexed cost of acquisition has to be subtracted from sale value. The LTCG and the subsequent investment (for claiming exemption) has to be duly reported in the ITR Form.

l Will I get any tax benefit if I prepay my entire home loan?

Prepayment of home loan does not entail any specific benefits whereas benefit on repayment of home loan is provided. If repayment is made after acquisition/ construction, principal paid in a financial year is to be deducted from gross total income under Section 80C before calculating net taxable income. You can claim interest payment up to `2 lakh as deduction under Section 24 for self-occupied property if construction is completed within five years from end of financial year when property was bought.

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