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Tax experts warn home sellers: Common mistakes can cost lakhs in capital gains tax. Check what to do and what not

Sujit Bangar, Founder of TaxBuddy.com, has highlighted some costly mistakes that many people make when selling their homes—errors that can lead to significantly higher tax payments. In a recent LinkedIn post, Bangar shared the case of a client who nearly paid Rs 1.87 lakh extra in taxes due to overlooked deductions. “One of our clients (Ram) was about to pay Rs 1,87,500 extra in taxes while selling his house. We added all legally allowed costs and successfully reduced his tax burden,” Bangar wrote. He emphasized that when calculating capital gains , taxpayers often underestimate what qualifies as part of the cost of acquisition or improvement. Many limit it to just the purchase price, missing out on legitimate deductions allowed under Section 55 of the Income Tax Act. What costs can you legally claim while selling property? According to Bangar, the following expenses can be added to your cost of acquisition—provided you have proper documentation: Stamp duty and registration fees Broke...
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This simple property move helped save ₹12.7 lakh tax, even with 2 jointly owned flats

A recent income tax tribunal ruling has clarified that owning two jointly held flats does not automatically disqualify a taxpayer from claiming Section 54F exemption, cutting a potential tax bill by ₹12.7 lakh. In a case concerning the 2013–14 assessment year, a taxpayer sold property for ₹64 lakh, generating a long-term capital gain (LTCG) of ₹61,65,546 after deducting the acquisition cost.  The entire gain was invested in a new residential property, and a full exemption under Section 54F of the Income-tax Act was claimed. The Income Tax Department rejected the claim, citing the “two-house condition” under Section 54F, which bars the exemption if the taxpayer owns more than one other residential property on the date of transfer.  According to the department, the taxpayer’s joint ownership of two other flats meant disqualification, resulting in a calculated tax demand of ₹12,80,123, including cess. The matter went before the Income Tax Appellate Tribunal, which held that S...
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Changed jobs recently? Here's how to file ITR without any errors

If you switched jobs during the last financial year, filing your income tax return ( ITR ) could be a bit tricky. With multiple Form 16s, possible TDS mismatches, and lump-sum payments like gratuity or PF withdrawals in the mix, even a minor slip-up can invite a notice from the tax department. Experts break down the common pitfalls and share tips to help you file your return smoothly. Don’t miss income from previous employer “One of the biggest mistakes taxpayers make is reporting income from only their latest employer and forgetting the salary earned from the previous one,” says Niyati Shah, chartered accountant and vertical head, personal tax at 1 Finance. “This leads to underreporting of income and can trigger a notice from the tax department.”   Deepesh Chheda, partner at Dhruva Advisors, points out that employees also often fail to inform their new employer about income from the earlier job using Form 12B.   “As a result, the new employer calculates tax only on the curre...
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Sold property? Know if 54EC bonds like NHAI, REC really help save capital gains tax

Selling a property often comes with a sweet profit—but also a bitter tax bill. Long-term capital gains (LTCG) on the sale of land or buildings attract a 12.5% tax (plus cess), and many sellers scramble to invest in 54EC bonds like those issued by NHAI or REC to save on this levy. But is this the smartest move financially? According to Sujit Bangar, Founder of Tax Buddy, the answer depends on your investment horizon, risk appetite, and financial goals. “Most people blindly rush to 54EC bonds to save tax, but they may be missing out on higher returns elsewhere,” he notes. Two primary ways to save capital gains tax Under the Income Tax Act, there are two major routes to tax exemption on LTCG: Section 54/54F – Reinvest the capital gain into a new residential property. Section 54EC – Invest in notified bonds such as NHAI or REC within six months of the sale. The 54EC route is popular because it's relatively low-risk and requires no involvement in the real estate market again. But this “...
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Think market income below Rs 12 lakh is tax free? TaxBuddy founder warns how this common mistake could attract big tax notice

A growing number of retail investors in India are discovering that earning less than ₹12 lakh from stock markets does not automatically mean a tax exemption. According to Sujit Bangar, founder of TaxBuddy.com, investors often get caught off guard because they overlook how each type of income is taxed under different rules. In a recent example, Bangar highlighted the case of a full-time investor who earned 7 lakh from the market. Expecting zero tax, the investor instead received a tax notice demanding 74,375. Breakdown of the investor's income The investor’s earnings included: 3 lakh in intraday losses ₹2.5 lakh from futures and options (F&O) gains ₹3.5 lakh in short-term capital gains  (STCG) ₹4 lakh in long-term capital gains (LTCG) The total profit was under ₹12 lakh. However, that did not make it exempt from tax. How tax rules treat different incomes Tax laws treat each income type separately: Intraday trading: Treated as speculative business income, taxed at slab rates, a...
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New ITR Utility: Is landlord’s PAN card needed for claiming HRA while filing income tax return?

Every salaried employee who has an  HRA component  in salary and who wants to claim house rent allowance ( HRA ) income  tax  benefits need to submit the  PAN  number of the landlord if the annual rent is above Rs 1 lakh. Failing to submit the landlord's PAN to your employer for claiming  rent HRA tax exemption , will result in losing the tax exemption. Also submitting a false PAN number of landlords will result in you getting a tax notice and also losing the HRA tax exemption altogether. Earlier, the online  ITR  form or its utility did not have field to give details regarding the HRA. However, it has changed now, the  income tax department  has revised the utility, and it now requires taxpayers to give more details of the HRA claim by salaried employees. So does this mean that you have to give the landlord’s PAN card details while filing ITR? Read below to know more about the importance of landlord’s PAN for your  rent HRA ...
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