Dividend from local cos are exempt

QI have been filing my tax return in the revised format of ITR-2A, showing my dividends income under the head “Exempted income” and claiming exemption under section 10(34). My problem this time around is whether the sale of my shares (for an amount of `1,09,600) in November last, needs to be reflected in the return for AY19.

— SRINIVASA RAO Any income by way of dividend referred to in Section 115-O is exempt under section 10(34) of the I-T Act, 1961. As per section 115-BBDA, any amount of dividend received from domestic firms to the extent of `10 lakhs is exempt from tax. Dividend amount in excess of `10 lakhs shall be liable to tax at 10 per cent (excluding surcharge & education cess). Any sale of shares, whether long- or short-term needs to be reflected in the return of income. The shares on which STT is paid/payable are eligible to be called as short term if they are held for less than 12 months & they are liable to be taxed at 15 per cent. If the shares on which STT is paid/payable are eligible to be called as long term if they are held for more than 12 months. The LTCG on shares on which STT is paid was totally exempt up to AY19. However, from AY20, they are liable to be taxed at 10 per cent, if the LTCG on sale of shares is in excess of `1 lakh.

QI availed a housing loan from my employer in 2014. Since then, I’ve been claiming deduction under sections 80C and 24(b) against the rental income derived from the property. I am planning to purchase another property by availing a bank loan. Can I claim the interest on this loan as a deduction against the rental income from the new property? Can I give the particulars of loss from both properties to my employer in order to consider while computing the tax to be deducted on my salary?

—RAMAN KUMAR You can claim deduction towards interest on the fresh loan taken to acquire the new property against the rental income from the said property. The interest on earlier loan taken from the employer can also be claimed as a deduction against the income from that property. The particulars of loss from both the house properties can be given to the employer who should take them into account while computing the tax to be deducted on your salary. However, the loss under the head income from house property to the extent of `2 lakh can be set off under any other head of income for the year. The loss in excess of `2 lakh if any, can be carried forward. (The writer is a Hyderabad-based chartered accountant. He can be reached at

info@rathiandmalani.com)