Sunday, April 25, 2010
Wednesday, April 14, 2010
capital gain on sale of house
Question: When an assessee transferred one residential house during the year, how the assessee is eligible for saving tax on such capital gain of house?
Profit on transfer of residential house property used for residential section 54:
As per section 54 of Income Tax Act, 1961 an Individual or HUF can save tax on long term capital gain on sale of residential house property.
Assessee using a house property (resident or let out) for more than 3 year from date of purchased, and such house is sold, long term capital gain arise on such transfer is exempted if assessee has invested into purchase or construction of new house within specified period from date of sale of such house.
Purchase of house:
Assessee must be Purchase another house within one year prior or 2 year after the transfer date of residential hose property.
Construction of House:
Assessee must be Construction another house within 3 year after the transfer date.
(assessee can start Construction of new house before the transfer of old house.)
Cost of Building includes price of land.
Quantum of deduction:
Capital Gain is more than Cost of Acquisition of new house:
As per section 54 of Income Tax Act, 1961, assessee is required to invest minimum amount equivalent to capital gain arisen on sale of house to nullify income tax on capital gain.
Capital gain old house = Long term capital gain of old house – Cost of acquisition of new house.
If the new assets is transfer within 3 year from date of acquisition or completion of construction, COA of new assets = NIL
Capital Gain is less than Cost of Acquisition of new house:
When assessee has invested more than long term capital gain amount in purchase or construction of new house, there will be no tax liabilities on such capital gain.
Capital gain old house = NIL (L.T.C.G - COA of new house).
Lock In period:
Assessee can not sale or transfer new house from date of purchase of the house, otherwise above exempted capital gain will be withdrawn.
Deposit in capital gain scheme 1988:
An assessee is not able to invest in new house before filling of due date of return, he can still get exemption from income tax, if such gain is deposited into capital gain deposit scheme 1988. Assessee has to deposit such capital gain amount into bank before due date of return and file deposit slip with return.
Such accounts can be opened as saving accounts or fixed deposit.
The deposit amount should be used within 3 year from date of transfer otherwise unutilized money of that account will be taxed in previous year when 3 year of transfer of assets is lapse.
Assessee can have purchase more than one house to claim exemption of this section.
Exemption of capital gain
Sold Capital gain Investment amount Nature of investment Section
House Long Term Long Term capital gain House 54
Specified securities 54EC
Land Long Term Capital gain amount Land 54B
Short Term Specified securities 54EC
Any other assets Long Term Sale consideration House 54F
Specified securities 54EC
Profit on transfer of residential house property used for residential section 54:
As per section 54 of Income Tax Act, 1961 an Individual or HUF can save tax on long term capital gain on sale of residential house property.
Assessee using a house property (resident or let out) for more than 3 year from date of purchased, and such house is sold, long term capital gain arise on such transfer is exempted if assessee has invested into purchase or construction of new house within specified period from date of sale of such house.
Purchase of house:
Assessee must be Purchase another house within one year prior or 2 year after the transfer date of residential hose property.
Construction of House:
Assessee must be Construction another house within 3 year after the transfer date.
(assessee can start Construction of new house before the transfer of old house.)
Cost of Building includes price of land.
Quantum of deduction:
Capital Gain is more than Cost of Acquisition of new house:
As per section 54 of Income Tax Act, 1961, assessee is required to invest minimum amount equivalent to capital gain arisen on sale of house to nullify income tax on capital gain.
Capital gain old house = Long term capital gain of old house – Cost of acquisition of new house.
If the new assets is transfer within 3 year from date of acquisition or completion of construction, COA of new assets = NIL
Capital Gain is less than Cost of Acquisition of new house:
When assessee has invested more than long term capital gain amount in purchase or construction of new house, there will be no tax liabilities on such capital gain.
Capital gain old house = NIL (L.T.C.G - COA of new house).
Lock In period:
Assessee can not sale or transfer new house from date of purchase of the house, otherwise above exempted capital gain will be withdrawn.
Deposit in capital gain scheme 1988:
An assessee is not able to invest in new house before filling of due date of return, he can still get exemption from income tax, if such gain is deposited into capital gain deposit scheme 1988. Assessee has to deposit such capital gain amount into bank before due date of return and file deposit slip with return.
Such accounts can be opened as saving accounts or fixed deposit.
The deposit amount should be used within 3 year from date of transfer otherwise unutilized money of that account will be taxed in previous year when 3 year of transfer of assets is lapse.
Assessee can have purchase more than one house to claim exemption of this section.
Exemption of capital gain
Sold Capital gain Investment amount Nature of investment Section
House Long Term Long Term capital gain House 54
Specified securities 54EC
Land Long Term Capital gain amount Land 54B
Short Term Specified securities 54EC
Any other assets Long Term Sale consideration House 54F
Specified securities 54EC
Wednesday, April 7, 2010
Monday, March 29, 2010
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Our dedication to the members' interest means that we strive for excellence. We combine a personal approach with high professional standards and aim to provide comprehensive tax services to our corporate, individual and Non-Resident clients.
for More
Income tax return
RETURN OF INCOME TAX
As 31st March 2010 is coming, EVERYBODY rushes to file income tax return. They try every place to find relevant information, which is required to file income tax return.
Income tax return is just information statement, which is given to the income tax department, regarding their earnings and tax status on such earnings during the last financial year. Income tax return can be filed with some relevant information by assessee himself or through a competent person. Last date for filing income tax return is 31st July for salary-class assessee and other assessee who do not require auditing under any act.
Golden rule of income tax: Income earned in previous year is taxable in assessment year. Previous year for period ended 31st March 2009 will be 2009-10 and assessment year will be 2010-11.
Last date of filing income tax return:
1. 31st July 2010: This is last date to file income tax return for individual’s who is not required to get audit under any act. Example: Salary income assessee, Business income if total turnover is less than 40 Lakhs or professional income is less than 10Lakhs during the previous year.
2. 30th September 2010: This is dead-line for that assessee, who is required to audit his/her books of accounts under any act during previous year.
Example: Any Company or any other assessee, which is required to get audit under any act.
Essential Documents required:
1. TDS certificate issued by employer or tax deductor:
Name, address and TAN of your employer or tax deductor
2. Form 16 (Salary income) and 16A (other income) must contain following details:
Income earned during the year by the asseessee
Details of salary income in form 16:
Basic Salary,
HRA,
other allowance or perquisite provided to employee
Deduction claim by employee
Tax calculation and its tax liabilities
Details of income(s) other than salary in form 16A:
Total earning by assessee from the person
Tax deducted during the year.
Total tax deduction by the tax deductor
3. Details of interest and other income and TDS on such income: (If any)
Savings bank deposits interest
Fixed deposits interest
Bonds, NSCs income
Lottery income
House property income
Capital gain
4. Photocopy on PAN card
5. Photocopy of last filed income tax return
6. FORM ITR 1 or IRT 2 or ITR 4
7. Details of D-MAT accounts if it is operated by assessee during the previous year.
8. Details of investments, which are not disclosed in TDS certificate: (if applicable)
Section 80C:
Insurance premium:
Premium amount paid to insurance company is eligible for deduction.
(Individual: Such insurance can be taken in name of self, spouse,
Child whether married or Dependant or non-dependant Child. AND
In case of HUF: Any member of HUF.
Provident fund: Amount Deposit in Statutory provident fund, recognized provident fund and/or public provident fund.
Maximum Rs 70000 can be deposited in single accounts in a previous year by the assessee.
Such amount can be deposited in name of own, Spouse and minor child.
In case of HUF: Any member of HUF.
NSC: Purchase of National Saving Certificate (1992),
Mutual Fund: Purchases of Unit linked insurance plan, mutual fund 10(23D) of LIC or any insurance company or any mutual fund (ELSS). Lock in period for the mutual fund is minimum 3 Years from date of purchase.
Pension Fund: Individual can deposit Pension fund, superannuation fund with employer or in private insurance company’s Pension Fund.
Infrastructure company bond: Deposit in a company which provides long term finance for infrastructure facilities/development in India.
Tuition fee: Any amount spent on tuition fee of assessee’s children for study in India (excluding development & donation fee, etc. charged to assessee)
The deduction is available only for two Children.
Fixed deposit: Amount Invested in fixed or term deposit (5 year or more). Subscribed of Share, debenture and bonds of Infrastructure Company.
Repayment of loan taken for constructing house property:
Deduction is allowed on repayment of Principle amount of loan taken only for construction or purchase of house.
Such loan must be taken from central government, bank, LIC, NHB, employer for construction of house, which is as per approved scheme.
Cost of house includes Stamp duty, registration duty, & other Expenses on transfer of house property except (admission cost of co-operative, cost of repair etc)
Section 80D: Medical insurance: if assessee has taken any medical insurance and premium paid through cheque (Other than Cash) for self, spouse, parent and dependents children.
Total deduction under this section:
Individual: Maximum Rs 15000 p.a for self, spouse, and dependant children.
Maximum Rs 15000 is additional for parents of individual’s. (WEF 2009-10)
HUF: Medical insurance for any member is Rs 15000 p.a.
Additional Rs 5000 is allowed as deduction, insurance taken if any member is senior citizen.
9. Details of other deduction:
Assessee has to provide information regarding any other deduction, which can be availed as deduction from gross total income. Example: Repayment of loan amount for education (Section 80E), Details of amount expenditure on any depend handicap person or on own.
10. Advance tax: Assessee has paid any advance tax during the year, deposit challan required for details like (Bank BSR code, date of deposit and tax paid) amount should be mention in ITR form.
11. Houseing Loan: Assessee has taken any loan for construction or purchase of house; he is eligible to enjoy some tax benefits on repayment of loan in EMI.
EMI of loan is consists of principle and interest part of loan:
Interest on house loan: Interest accrued or paid on such loan is deducted from income of house property.
Self occupied House: Maximum benefit is allowed related to interest part to an assessee is Rs 1,50,000 P.A
Let out House: Whatever amount is paid for interest is allowed as deduction under section 24.
12. Statement of any other income: Assessee has to collect all other information regarding other incomes, which are required to show into income tax return.
13. Statement or proof of any donation: If assessee has donated any amount to specified fund (PM’s Relief Fund), he will be eligible for deduction during the year.
ITR Form:
Particulars Forms
Salary & interest income (individual) ITR - 1
not having P.G.B.P (individual or HUF) ITR - 2
Partners of firm or Aop not having other business ITR - 3
Having P.G.B.P (individual or HUF) ITR - 4
Firm, AOP, BOI except section 139(4A),B,C,D ITR - 5
Companies except claiming exemption of 11 ITR - 6
filling u/s 139 (4A), B,C,D ITR - 7
Slab Rate of Taxes:
Rate for AY 2010-11
Income range for
Male (Below 65 years) Female (Below 65 years) Senior citizen (Above 65 years)
160000 190000 240000
160001-300000 190001-300000 240001-300000
300001-500000 300001-500000 300001-500000
Above 500000 Above 500000 Above 500000
Special rate:
Tax on long term capital gain: @ 20%
Tax on short term capital gain under section 111A: @ 15%
Lottery Income: @ 30%
Edu.cess and SH edu.cess is 2 and 1%, i.e 3%
For personal Enquiry please contact:
K n J Partners
A-58 (LGF) Lajpat Nagar – 1,
New Delhi: 110024
Phone No: 011- 29818222, 9910209303
Man.associate@gmail.com
As 31st March 2010 is coming, EVERYBODY rushes to file income tax return. They try every place to find relevant information, which is required to file income tax return.
Income tax return is just information statement, which is given to the income tax department, regarding their earnings and tax status on such earnings during the last financial year. Income tax return can be filed with some relevant information by assessee himself or through a competent person. Last date for filing income tax return is 31st July for salary-class assessee and other assessee who do not require auditing under any act.
Golden rule of income tax: Income earned in previous year is taxable in assessment year. Previous year for period ended 31st March 2009 will be 2009-10 and assessment year will be 2010-11.
Last date of filing income tax return:
1. 31st July 2010: This is last date to file income tax return for individual’s who is not required to get audit under any act. Example: Salary income assessee, Business income if total turnover is less than 40 Lakhs or professional income is less than 10Lakhs during the previous year.
2. 30th September 2010: This is dead-line for that assessee, who is required to audit his/her books of accounts under any act during previous year.
Example: Any Company or any other assessee, which is required to get audit under any act.
Essential Documents required:
1. TDS certificate issued by employer or tax deductor:
Name, address and TAN of your employer or tax deductor
2. Form 16 (Salary income) and 16A (other income) must contain following details:
Income earned during the year by the asseessee
Details of salary income in form 16:
Basic Salary,
HRA,
other allowance or perquisite provided to employee
Deduction claim by employee
Tax calculation and its tax liabilities
Details of income(s) other than salary in form 16A:
Total earning by assessee from the person
Tax deducted during the year.
Total tax deduction by the tax deductor
3. Details of interest and other income and TDS on such income: (If any)
Savings bank deposits interest
Fixed deposits interest
Bonds, NSCs income
Lottery income
House property income
Capital gain
4. Photocopy on PAN card
5. Photocopy of last filed income tax return
6. FORM ITR 1 or IRT 2 or ITR 4
7. Details of D-MAT accounts if it is operated by assessee during the previous year.
8. Details of investments, which are not disclosed in TDS certificate: (if applicable)
Section 80C:
Insurance premium:
Premium amount paid to insurance company is eligible for deduction.
(Individual: Such insurance can be taken in name of self, spouse,
Child whether married or Dependant or non-dependant Child. AND
In case of HUF: Any member of HUF.
Provident fund: Amount Deposit in Statutory provident fund, recognized provident fund and/or public provident fund.
Maximum Rs 70000 can be deposited in single accounts in a previous year by the assessee.
Such amount can be deposited in name of own, Spouse and minor child.
In case of HUF: Any member of HUF.
NSC: Purchase of National Saving Certificate (1992),
Mutual Fund: Purchases of Unit linked insurance plan, mutual fund 10(23D) of LIC or any insurance company or any mutual fund (ELSS). Lock in period for the mutual fund is minimum 3 Years from date of purchase.
Pension Fund: Individual can deposit Pension fund, superannuation fund with employer or in private insurance company’s Pension Fund.
Infrastructure company bond: Deposit in a company which provides long term finance for infrastructure facilities/development in India.
Tuition fee: Any amount spent on tuition fee of assessee’s children for study in India (excluding development & donation fee, etc. charged to assessee)
The deduction is available only for two Children.
Fixed deposit: Amount Invested in fixed or term deposit (5 year or more). Subscribed of Share, debenture and bonds of Infrastructure Company.
Repayment of loan taken for constructing house property:
Deduction is allowed on repayment of Principle amount of loan taken only for construction or purchase of house.
Such loan must be taken from central government, bank, LIC, NHB, employer for construction of house, which is as per approved scheme.
Cost of house includes Stamp duty, registration duty, & other Expenses on transfer of house property except (admission cost of co-operative, cost of repair etc)
Section 80D: Medical insurance: if assessee has taken any medical insurance and premium paid through cheque (Other than Cash) for self, spouse, parent and dependents children.
Total deduction under this section:
Individual: Maximum Rs 15000 p.a for self, spouse, and dependant children.
Maximum Rs 15000 is additional for parents of individual’s. (WEF 2009-10)
HUF: Medical insurance for any member is Rs 15000 p.a.
Additional Rs 5000 is allowed as deduction, insurance taken if any member is senior citizen.
9. Details of other deduction:
Assessee has to provide information regarding any other deduction, which can be availed as deduction from gross total income. Example: Repayment of loan amount for education (Section 80E), Details of amount expenditure on any depend handicap person or on own.
10. Advance tax: Assessee has paid any advance tax during the year, deposit challan required for details like (Bank BSR code, date of deposit and tax paid) amount should be mention in ITR form.
11. Houseing Loan: Assessee has taken any loan for construction or purchase of house; he is eligible to enjoy some tax benefits on repayment of loan in EMI.
EMI of loan is consists of principle and interest part of loan:
Interest on house loan: Interest accrued or paid on such loan is deducted from income of house property.
Self occupied House: Maximum benefit is allowed related to interest part to an assessee is Rs 1,50,000 P.A
Let out House: Whatever amount is paid for interest is allowed as deduction under section 24.
12. Statement of any other income: Assessee has to collect all other information regarding other incomes, which are required to show into income tax return.
13. Statement or proof of any donation: If assessee has donated any amount to specified fund (PM’s Relief Fund), he will be eligible for deduction during the year.
ITR Form:
Particulars Forms
Salary & interest income (individual) ITR - 1
not having P.G.B.P (individual or HUF) ITR - 2
Partners of firm or Aop not having other business ITR - 3
Having P.G.B.P (individual or HUF) ITR - 4
Firm, AOP, BOI except section 139(4A),B,C,D ITR - 5
Companies except claiming exemption of 11 ITR - 6
filling u/s 139 (4A), B,C,D ITR - 7
Slab Rate of Taxes:
Rate for AY 2010-11
Income range for
Male (Below 65 years) Female (Below 65 years) Senior citizen (Above 65 years)
160000 190000 240000
160001-300000 190001-300000 240001-300000
300001-500000 300001-500000 300001-500000
Above 500000 Above 500000 Above 500000
Special rate:
Tax on long term capital gain: @ 20%
Tax on short term capital gain under section 111A: @ 15%
Lottery Income: @ 30%
Edu.cess and SH edu.cess is 2 and 1%, i.e 3%
For personal Enquiry please contact:
K n J Partners
A-58 (LGF) Lajpat Nagar – 1,
New Delhi: 110024
Phone No: 011- 29818222, 9910209303
Man.associate@gmail.com
Sunday, March 21, 2010
Tax on gift (New amendments in budget 2010)
Taxation of Gift:
Taxation on gifts became difficult budget by budget.
Since last two budgets the scenario of gift has changed. Only individual’s and Hindu Undivided Family were covered to pay taxes on gifts received from any other person other than relatives of assessee and if total value of gifts exceeded Rs. 50000 per annum.. Commodities/kinds (Article) gifted to individual or HUF was outside preview of taxes on gift income till 1st oct. 2009.
Provision up to 1.10.2009:
Taxation on Gift for Individual and HUF:
When an individual or HUF has received any gift in cash (not being in kind), without consideration or adequate consideration, exceeding Rs 50000 in a previous year after 1.4.2006 upto 01.10.2009 from any body, other than relative, is taxable in hand of assessee as income from other source .
Money received in following situations is not taxable in hand of assessee:
Ø From relatives at any occasion
Ø On occasion of marriage by any person
Ø Received on event of death of payer
Ø By way of will, inheritance
Ø Fund, educational institute, hospital, Local authority, (covered under section 10) & charitable trust section 12
Meaning of relative:
Ø Spouse,
Ø Child (Own, Step and legally adopted child of assessee) ,
Ø Brother’s & Sister’s own as well as of spouse’s
Ø Parents Both own & of spouse’s
Ø Brother’s and sister’s of own parents.
Ø Linear ascender or descendant of assessee as well as spouse of assessee
Provision from 1.10.2009 to 31.5.2010:
Taxation of Gift for Individual and HUF:
When an individual or HUF has received any gift in cash or kinds, without consideration or inadequate consideration, and value of the gift exceeding Rs 50000 in a previous year from any body, other than relative, is taxable in hand of assessee as income from other source .
Amendments in budget 2010:
Taxation on Gift for Individual and HUF: as mentioned above..
Taxation on Gifts for company and partnership firm (Introduced):
Where a firm or company (Public are not substantial involved), has received money or article (kinds), shares etc. on and after 1st June 2009 from any person (individual’s/HUF/Company or any Concern) as gift in cash, share or kind, without consideration or inadequate consideration, and value of the gift exceeding Rs. 50000 in a previous year, such gift is taxable in hand of company under head of income from other source.
Taxability of Gift (After 01.06.2010) | ||||
S.No | Gift given by | Gift Received by | Taxability | Nature |
1 | Individual | Individual | YES | Cash or in Kind |
HUF | YES | |||
Company | YES | |||
2 | HUF | Individual | YES | Cash or in Kind |
HUF | YES | |||
Company | YES | |||
3 | Company | Individual | YES | Cash or in Kind |
HUF | YES | |||
Company | YES | |||
Taxability of Gift (After 01.10.2009 To 31.05.2010) | ||||
S.No | Gift given by | Gift Received by | Taxability | Nature |
1 | Individual | Individual | YES | Cash or in Kind |
HUF | YES | |||
Company | N.A | |||
2 | HUF | Individual | YES | Cash or in Kind |
HUF | YES | |||
Company | N.A | |||
3 | Company | Individual | YES | Cash or in Kind |
HUF | YES | |||
Company | N.A | |||
Saturday, March 20, 2010
Contact Us
All Dear,
Email id: Man. Associate@gmail.com
I, as being CA, here for discussion on any issue regarding tax and other legal matter. Feel free to discussion.
Email id: Man. Associate@gmail.com
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