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Selling XXX Implications PDF
Selling XXX Implications PDF
Selling XXX Implications PDF
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Selling a house? Watch out for tax implications Last date for filing original FY2014-15 ITR was Looking to save tax for FY 2017-18? Here are 6 Here's how TDS o
1 2 31.3.2017: If you missed this too, here's what to 3 investments with tax-free income 4
do
1 of 13 27/04/2017 15:43
Selling a house? Watch out for tax implications http://economictimes.indiatimes.com/wealth/tax/selling-a-house-watch...
house property is sold within five years of the end of the financial year
it was purchased, the tax benefits claimed go out of the window i.e. tax
which were claimed earlier will have to be reversed. The tax deduction
for the principal repayment, stamp duty and registration under Sec 80C
sed and the amount becomes taxable in the year of sale. Only the
n of the interest payment under Section 24B is left untouched.
hy, from the tax point of view, it is advisable to hold a property for at
e years. If you sell a property after three years, the profit is treated as
capital gains and taxed at 20% after indexation. Indexation takes into
account the inflation during the holding period and accordingly adjusts the
purchase price, thereby slashing the tax burden for the seller. There are other
benefits too. The owner can claim various exemptions in case of long-term
capital gains, but no such benefit is provided for short-term gains.
In case the entire capital gains are not invested, the balance amount is charged
to longterm capital gains tax. However, the entire tax exemption will be
reversed if the new property is sold within three years of purchase or
construction. In such a case, the entire capital gains from the sale of the
previous house will be considered as short-term gains and taxed at the normal
slab rates.
If you are not keen to lock-in your gains from sale of the house in another
property, there is another way out. You can claim exemption under Section 54
(EC) by investing the long-term capital gains for three years in bonds of the
National Highways Authority of India and Rural Electrification Corporation
Limited within six months of selling the house. However, one can invest only up
to Rs 50 lakh in these bonds in a financial year.
Selling a house? Watch out for tax implications Last date for filing original FY2014-15 ITR was Looking to save tax for FY 2017-18? Here are 6 Here's how TDS o
1 2 31.3.2017: If you missed this too, here's what to 3 investments with tax-free income 4
do
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, if you have missed this final deadline for filing the original returns for
15, then here's what can you do.
idual who has missed both the deadlines is now left with an option of
application with the relevant tax authority to explain the delay in filing
If such application is accepted by the tax authorities based on the validity and
correctness of the claim and satisfaction of the tax officer, only then is the
person allowed to file the ITR.
The return, in this case, would be filed as a normal one. There would be no
restrictions or conditions attached to the filing of the income tax return in this
manner i.e. he can still receive the section 80C benefit. However, a person will
lose certain benefits like the option of carrying forward and set off of losses,
revision of tax returns.
What if you have received an income tax notice for the relevant FY?
A situation may arise where you haven't filed your return or your application (for
filing after the aforementioned deadline) is rejected by the income tax
department. In that case, you may receive a notice from the department.
As per the income tax laws, a person who has not filed his/her return within the
stipulated time can be issued a notice under section 142 of the Income Tax Act.
Section 142 (1) (i) states that any person, whose total income exceeds the
maximum amount which is not chargeable to tax and who has not furnished the
details of the income earned in the relevant year can be served the notice by
the Assessing officer asking for details of the same.
Chadha says, "In this situation, the individual has the option to file the return of
the income in response to the notice received under this section. Application for
condonation of delay is a suo moto action by the individual as compared to
notice issued by tax authorities asking the individual to furnish the return of
income ."
Also, one can also receive a notice under section 148. Notice under this section
Selling a house? Watch out for tax implications Last date for filing original FY2014-15 ITR was Looking to save tax for FY 2017-18? Here are 6 Here's how TDS o
1 2 31.3.2017: If you missed this too, here's what to 3 investments with tax-free income 4
do
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Traditional Insurance Plans | Tax Saving | Equity Mutual Funds | ELSS | EEE
-tax return in them, therefore, comes down after factoring in the tax.
ple, for someone who pays 30.9 percent tax, the post-tax return on a
5-year bank FD of 7 per cent is 4.8 per cent per annum!
They can still be tax-exempt income if even after adding the interest income,
the individual's total income remains within the exemption limit as provided by
income tax rules. Illustratively, a taxpayer between ages 60-80 earns only
interest income from such taxable investments of about Rs 3 lakh a year. Since
the income for such individuals is exempted till Rs 3 lakh, even the interest
earned from investment in taxable products does not translate into tax liability
for them.
But, for most others especially those earning a salary or having income from
business or profession, choosing tax savers that come with E-E-E status helps.
The investment in these get EEE benefit i.e. exempt- exempt- exempt status on
the income earned. The principal invested qualifies for deduction under Section
80C of the Income Tax Act, 1961 and the income in all of them is tax exempt
under Section 10.
Here are few such tax savers that not only help you save tax but also help you
earn tax-free income. But, not all are the same in terms of features and asset-
class, so making the right choice is essential.
Selling a house? Watch out for tax implications Last date for filing original FY2014-15 ITR was Looking to save tax for FY 2017-18? Here are 6 Here's how TDS o
1 2 31.3.2017: If you missed this too, here's what to 3 investments with tax-free income 4
do
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ome from the salary of an employee is more than the exempted limit,
oyer will deduct TDS. According to Dr. Suresh Surana, Founder, RSM
onsulting , "Every employer is required to deduct income-tax on the
d income of the employee. The estimated income is computed in the
g of the financial year considering the Tax Declaration Statement
"TDS liability is calculated on the said estimated income for the whole year at
the average rate of income tax (i.e. on pro rata basis) which is based on the
rates in force for the financial year in which payment is made. The Finance Act
of each financial year specifies the rates in force for deduction of tax at source
which is basically the slab rate," says Dr. Surana
Here's a stepwise modalities from Dr. Surana for TDS in case of employees:
a) First compute gross salary (including all fixed & estimated variable
components) allowing all deductions / exemptions based on Investment
declaration for the whole year
b) Add income from all other heads as reported by employee
c) Deduct loss from House Property
d) This will be the amount of total income of the employee on which income tax
is required to be deducted.
e) Calculate Income-tax on such income based on slab rate along with the
surcharge and cess as applicable.
f) Every month, 1/12th of the amount of tax as arrived at (e) shall be deducted.
g) Any excess or deficit arising out of any earlier deduction can be adjusted by
increasing or decreasing the amount of subsequent deductions during the same
financial year.
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Points to note
1. ITR 1 Sahaj is an annexure-less form. Any document attached along with the
return will be returned to the person filing the return.
Selling a house? Watch out for tax implications Last date for filing original FY2014-15 ITR was Looking to save tax for FY 2017-18? Here are 6 Here's how TDS o
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"The ITAT has recognized the concept of real income, which is well accepted
under I-T laws. It held that the salary against which notice pay was adjusted
had not become due, as the net amount was paid by the employer. The
employee had no right to receive the portion of the salary that had been
deducted, under the terms of employment. Thus, the deducted amount could
not be held as taxable salary income," said Gautam Nayak, tax partner, CNK &
Associates.
In this case, which pertains to financial year 2009-10, N. Rebello, had resigned
from two companies, viz: Reliance Communication and Sistema Shyam
Teleservices. Both companies had deducted a notice pay of Rs. 1.10 lakh and
Rs. 1.66 lakh respectively and handed balance salary dues to Rebello.
Accordingly in his I-T return, Rebello claimed as a deduction Rs. 2.76 lakh from
gross salary income, as this amount was not received by him. I-T authorities, in
the course of assessment, denied such deduction. Commissioner (Appeals),
which is the first level of appeal for a taxpayer, also upheld the action of the I-T
authorities.
The Commissioner (Appeals) pointed out that under section 15 of the I-T Act,
tax is triggered when the salary becomes due, irrespective of whether it is paid
or not. Secondly, section 16 of the Act does not provide for any deduction made
by the employer for the notice period. Thus, the deduction of Rs. 2.76 lakh
claimed by Rebello was not upheld. This led to Rebello filing an appeal before
the ITAT, which decided in his favour.
READ MORE ON Taxable Salary | Taxable Income | Tax Deduction | Income Tax
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In the light of draft notification issued under the third provision to the
clause (38) of section 10 of the Income-tax Act,1961, kindly advise on the
applicability of tax on capital gains in the following circumstance. My
mother-in-law, who was entitled to purchase the rights issue shares of
Wheels India in 2014 transferred it to me (for nil consideration) and
accordingly I paid the money for the rights to the company. Will then
issued the rights shares to me in March 2014.Now I wish to sell these
shares.Would I be exempt from capital gains tax considering these were
held for more than 12 months and will be sold through stock exchange
and STT will be paid on sale? Or will I be charged tax (rate ?) considering
that the shares were purchased in an off-market transaction directly
from the company and possibly no STT was paid then?
The government has issued draft notification and representation have been
made.The final notification is pending. The legal position regarding the
application of Section 10(38) is not yet crystallised.I suggest that you should
wait till the final notification is issued giving clarification on various issues
including the purchase of shares through the rights issue by the company.
READ MORE ON Tax | Section 10 (38) | Income Tax | Gift Taxation | Demonetisation
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Definitions
ECONOMY EQUITY INSURANCE BUDGET MARKETING MUTUAL FUND SPACE TECHNOLOGY MORE
3rd Party Insurance Absolute Assignment Accidental Death Benefit And D...
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Selling a house? Watch out for tax implications Last date for filing original FY2014-15 ITR was Looking to save tax for FY 2017-18? Here are 6 Here's how TDS o
1 2 31.3.2017: If you missed this too, here's what to 3 investments with tax-free income 4
do
10 of 13 27/04/2017 15:43
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mployer has not paid the tax deducted from your salary, there will be
with details of the payment of TDS.On the administrative ground,
r authorities will not give credit for the TDS not paid by the employer.
file the appeal against the order not granting credit for TDS.
You can also inform the Commissioner of Income Tax (TDS) in whose
jurisdiction the case of the employer falls about the non-payment of TDS.
Although legally your claim is valid, you will have to litigate with the tax
department for your genuine claim of credit of TDS.
Assuming FD is created every month for this amount in her bank account,
can she still deposit Form 15G in her bank as her total taxable income
from Bank FD interest will be less than the minimum tax slab of Rs 2.5
lakh? She would like to deposit 15G so that the bank does not deduct 10%
TDS as she does not file tax return.
Every month you can give gift to your sister of Rs 30,000. Neither you nor your
sister will be liable to pay any tax on the amount. She can invest the amount
received as gift in the fixed deposit and earn interest income. As her total
income is below Rs 2.5 lakh, she can furnish form 15G to the bank under Rule
29C of the I-T Rules, 1962, either in the paper form or electronically.
Under Section 80DD of the I-T Act, 1961, an individual who is a resident in
India and is incurring any expenditure for the medical treatment of a dependant
Selling a house? Watch out for tax implications Last date for filing original FY2014-15 ITR was Looking to save tax for FY 2017-18? Here are 6 Here's how TDS o
1 2 31.3.2017: If you missed this too, here's what to 3 investments with tax-free income 4
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So decisions by the Mumbai and Ahmedabad ITATs - one accepting the tax
exemption claim on payment of rent to a relative and the other de nying it-may
seem contrary , but the orders were based on specific facts in each case.
Rent paid to spouse, HRA claim allowed: In 2013, the Ahmedabad ITAT
bench in Bajrang Prasad Ramdharani's case, allowed an HRA exemption claim
by the taxpayer, even though rent was paid by him to his spouse. He was living
with his wife but paid her rent via bank transfers. The ITAT held that the
taxpayer had fulfilled the twin requirement of occupying a house not owned by
him and payment of rent.
Rent paid to mother , HRA claim disallowed: But more recently , the Mumbai
bench disallowed the HRA claim by Meena Vaswani who had contended that
she lived with her aging mother to take care of her and paid rent to her mother
in cash. While rent receipts were obtained by her, as the transaction was with
her mother, she had not entered in to any formal contract. Vaswani was not
able to produce proof of cash withdrawals from her bank to substantiate the
rental payments. Moreover, the authorities were able to prove that she was not
residing with her mother, but in another apartment nearby with her husband and
daughter. The ITAT agreed with I-T authorities that the transaction was a sham
Selling a house? Watch out for tax implications Last date for filing original FY2014-15 ITR was Looking to save tax for FY 2017-18? Here are 6 Here's how TDS o
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Selling a house? Watch out for tax implications Last date for filing original FY2014-15 ITR was Looking to save tax for FY 2017-18? Here are 6 Here's how TDS o
1 2 31.3.2017: If you missed this too, here's what to 3 investments with tax-free income 4
do
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