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Which ITR form to file if income is in dollars?

If one is earning income in dolalrs in the form of royalty, it will be professional income and one will have to use Form ITR-3 to file return.

ET Bureau|
Jun 11, 2018, 06.30 AM IST
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If income earned from royalty is less than Rs 50 lakh, one can avail 50% deduction for expenses without maintaining any books of accounts.
Query: My friend is a writer and has earned income in dollars from the sale of his books abroad. Which income tax return (ITR) form should he file?

Amit Maheshwari Partner, Ashok Maheshwary and Associates replies:
Assuming your friend is earning this income in the form of royalty, it will be considered professional income and he will have to use Form ITR-3 to file his return.

Further, if income earned from royalty is less than Rs 50 lakh, he can avail 50% deduction for expenses without maintaining any books of accounts under Section 44ADA and he will need to file his return of income via Form ITR-4. He can also claim deduction for royalty income under Section 80QQB of up to Rs 3 lakh or the actual amount earned, whichever is less, if the royalty amount is received as a lump sum.

If the royalty amount is not received as a lump sum, then royalty received in excess of 15% of the value of the books sold will not be tax deductible. However, if the royalty is received as lump sum, this 15% limit is not applicable.

Query: I am 79 years old and my total income falls below the taxable income threshold. However, it includes both long-term and short-term capital gains. Will I have to pay tax on these gains?

Ashok Shah Partner, N.A. Shah Associates replies:
For senior citizens, income up to Rs 3 lakh is exempt from tax. So, if your total taxable income, including the long- and short-term capital gains, does not exceed Rs 3 lakh, you won’t have to pay any tax on your capital gains. Once you cross the age of 80, income up to Rs 5 lakh will be exempt from tax.

Query: I am 76 and have been suffering from asthma and high blood pressure for the past several years. Can I claim deduction of Rs 30,000 under Section 80D towards medical expenses incurred because of my health condition?

Rakesh Bhargava Director, Taxmann replies:
You cannot claim deduction for the medical expenditure incurred during the financial year 2017-18 as this deduction was available only to people aged 80 and above. Starting financial year 2018-19, the age limit to avail this deduction has been brought down to 60 and the limit of deduction has been raised to Rs 50,000. So, you will be able to claim the deduction for the medical expenses incurred in 2018-19, provided you are not covered by a health insurance policy.

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