When filing a tax return, one must disclose income from all sources, regardless of the amount.

By Chirag Nangia

If I pay tuition fees to a foreign college, do I have to pay taxes for this payment? Do I have to submit a declaration to SFT to send money to my child abroad as living expenses?
—Apurba Bhattacharya

As of October 1, 2020, an authorized reseller is required to collect withholding tax (TCS) at 5% on any payment abroad (under LRS) of Rs 7 lakh or more or all amounts exceeding Rs 7 lakh during a financial year. If PAN or Aadhaar is not available, the rate will be 10%. The TCS credit can be offset against the payor’s final tax in India. Therefore, if the tuition or living expenses paid by you exceeds Rs 7 lakh, the tax will be collected at source by the dealer.

For question B, a “statement of financial transactions and reportable account” (SFT) should be provided by specified persons such as banks, corporations, persons authorized under the Foreign Exchange Management Act if the nature and the value of account holder transactions exceed prescribed thresholds. You will not be required to submit the return. The designated person will report your high value transactions to the government.

l Last year I sold a property at a loss. Do I have to file an RTI for this? I am retired. In the absence of this capital loss information, can I use RTI 1?
—Subal Basak

When filing a tax return, one must disclose income from all sources, regardless of the amount. Otherwise, when processing the return, the tax department may raise an issue or make adjustments due to a mismatch. You can report your pension income and capital gains in ITR 2. You must report the sale price, acquisition cost, and capital gains from the sale of property.

l What is the tax benefit on the student loan?
—Deepak Kumar

In accordance with Section 80E, anyone who takes out a loan from a financial institution or charity approved for higher education, whether in India or abroad, can claim an interest deduction. paid for eight years, counting from the tax year in which he started paying. interest on the loan or until the tax year in which interest is paid in full, whichever occurs first. The student loan can be taken out for yourself, your spouse, your children or a student for whom you are the legal guardian.

(The writer is the director, Nangia Andersen India. Send your questions to [email protected])

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