24 Jun 2019 03:56am IST
If you have a tax related query or seeking general advice or you want to boost your GQ on tax matters, send us an email and we shall forward it to our in house tax guru V B Prabhu Verlekar. Emails should be sent to this email Id : [email protected]
Two of us have purchased a flat, for a cost of Rs 47 lakh, through a loan from SBI. Till today loan EMI’s are being deducted from my NRE account. Due to a dispute the other party, wants me to leave the flat, for which they are ready to pay me the amount, of around Rs 42 lakh, so far invested by me on purchase of flat and on interior furnishing. Please advise me as how to accept this amount of Rs 42 lakh without IT implications?
— Oswin Fernandes via email
. From the facts above it appears that you are a co-owner of the flat. Your query is not clear regarding the exact date of purchase, cost towards interior furnishing. Presuming that since you are selling your rights in the flat, the transaction amounts to transfer for the purpose of capital gains as per Income Tax Laws. Accordingly, you will have to compute capital gains, which is sale proceeds minus cost of acquisition, and will be liable for tax on the same. Amount received for the furnishing is not taxable as the same may be considered as personal assets, provided the cost can be established with documentary evidence.
Since you are a non-resident, 20.8% tax will have to deducted at source from the sale proceeds paid to you.
If the transfer is after 24 months from purchase, you will have to compute capital gains after indexation of the cost and 20% tax on long term capital gains will be applicable. If the flat is sold within 24 months, the short-term capital gains computed will be taxable at applicable slab rates.
The Godmother of my child who is a family friend has gifted Rs 1 lakh on her first birthday. How will this amount be treated for Income Tax?
— Alexa S Braganza, Margao
. Gift amounts received from non-specified relatives as provided u/s 56(2)(v) in excess of Rs 50000 is considered as income liable for tax. Godmother is not covered under the definition of ‘relative’ u/s 2(41) of the act. In view of this, gifted amount of Rs 1 lakh will be treated as income of the minor child and the same will be included in the hands of the parent with higher income than the other u/s 64 of the act.
I have a minor son. He earns interest of Rs 4 lakh on fixed deposits gifted by his grandfather and this is added in my income while filing tax returns. If I deposit Rs 1.50 lakh in PPF account out of this interest in the name of my son, will I be able to claim deduction u/s 80C?
— Shivanand U Amonkar, Porvorim
. U/s 64(1A) of the act, income of the minor is required to be included in the hands of parents whose income is higher. Accordingly, minor’s income of Rs 4 lakh has been rightly included in your income. You will be eligible to claim deduction of Rs 1.50 lakh for PPF deposited in son’s name. However, total deduction you can claim u/s 80C is restricted to Rs 1.50 lakh only. This is held by Madras High court in case of V S Chelliha (147 ITR 590)
I have purchased a new residential flat for use of my family. Can I claim payment made towards stamp duty and registration charges under section 80C?
. Yes. Payment for stamp duty and registration fee and other expenses for such transfer of such house property in your favor for self residence, can be claimed by way of deduction upto Rs 1.50 lakh under section 80C in the year in which it is paid. This is within overall limit of all deductions available u/s 80C.
I have received education scholarship from Goa University of Rs 1,20,000 of which I have spend Rs 80,000 on educational expenses. Am I liable to pay tax on scholarship received?
— Sakshi Madkaikar, Panjim
. Scholarship received from by Government, University, Board, Trust, etc is exempt irrespective of actual expenditure incurred by the recipient to meet the cost of education. Hence no tax on Rs 1,20,000.
I am buying a second hand apartment in a co-operative housing society in Panaji for 85 lakh which will be paid in instalments. What income tax formalities I have to comply with?
— Rajesh Shirvoikar, Calangute
. U/s 194(I) (A) of the I-T Act, where sales consideration for immovable property exceeds Rs 50 lakh, tax @ 1% is required to be deducted at source at the time of making payment or at the time of credit, whichever is earlier, to resident seller and issue him a certificate of TDS in Form 16B.