Harsh Bhuta Chartered Accountant
Harsh is a Chartered Accountant with over 10 years of experience in the field of taxation advisory and corporate finance. He has represented several matters before the Income Tax Appellate Tribunal and the Commissioner of Income Tax Appeals. He regularly advises a number of top corporate houses, private equity investors and multinational companies on Income Tax and GST implications. He has also been actively involved in cross border structuring for private equity and strategic M&A transactions. He is a Partner at Bhuta Shah & Co LLP. Prior to joining Bhuta Shah & Co LLP, he was part of the Transaction Advisory team at Ernst & Young (EY). He started his career with PWC. Harsh is a CFA Charterholder and a fellow member of the Institute of Chartered Accountants of India, where he was placed amongst the top 30 rank holders in India in the CA Final Examinations
Answers
Taxes & Duties
#gst#property#oc
Does a purchaser need to pay GST while puchasing a property in a building with OC?
Does a purchaser need to pay GST while puchasing a property in a building with OC?
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Answered on November 08, 2017
GST is levied on amount payable prior to the issuance of completion certificate. In case of supply of duly constructed property, no GST is payable.
Answered on November 08, 2017
This is a very generic question. However, it would depend upon the facts of each case. Under the VAT regime, many States had introduced composition scheme with tax rates as low as 1%, without Input Tax Credit (ITC). There is no such composition scheme under the GST regime. At the same time, builders would be eligible to claim ITC on inputs/input services used in the execution of works contract...
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Taxes & Duties
#property#july#letter#purchase
I bought a property after July 2010. I have received a letter from the Central Govrnment asking for service tax which is due on this property. Is the service tax due on such a purchase?
I bought a property after July 2010. I have received a letter from the Central Govrnment asking for service tax which is due on this property. Is the service tax due on such a purchase?
Answered on November 08, 2017
The liablity to pay service tax is on the service provideer (builder in this case). Service tax department cannot raise demand on the buyer of the property to pay service tax on behalf of the builder.
Taxes & Duties
#gift#flat#legal#implications
If I want to gift my flat to my daughter, what are the legal implications regarding: 1. Title and how is this established, 2. Is gift tax leviable and when?
If I want to gift my flat to my daughter, what are the legal implications regarding: 1. Title and how is this established, 2. Is gift tax leviable and when?
Answered on November 08, 2017
According to Section 56(2) of the Income Tax Act, the gift of flat received by your daughter shall be exempt, as it is a gift received from relative. On registering the gift deed the stamp duty and registration fees needs to be paid. There will be no gift tax on the said transaction.
Taxes & Duties
#flat#possession#sell#capital#transaction
I purchased a flat in 2004, and another one which I will get possession of in the first quarter of 2015. I will move from the old flat to the new flat once it is ready, and then sell the old flat. I would like to minimize the capital gains tax on this transaction. How do I time the two transactions to do so?
I purchased a flat in 2004, and another one which I will get possession of in the first quarter of 2015. I will move from the old flat to the new flat once it is ready, and then sell the old flat. I would like to minimize the capital gains tax on this transaction. How do I time the two transactions to do so?
Answered on November 08, 2017
If you invest the capital gain arising from the sale of residential flat in another residential flat then the provision of section 54 of Income Tax Act shall apply (i.e selling of one residential property and purchasing another residential property within within 1 year before or 2 years after the due date of transfer of the Property sold or construct a residential house property within a period...
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Taxes & Duties
#occupy#loans#rent#loan
I own three flats, one of which I occupy myself. The other two are empty. All three have been bought with home loans which are still being repaid. Can I give out the other two flats on rent, and still claim tax benefits on the home loan interest payments?
I own three flats, one of which I occupy myself. The other two are empty. All three have been bought with home loans which are still being repaid. Can I give out the other two flats on rent, and still claim tax benefits on the home loan interest payments?
Answered on November 08, 2017
Yes, you can give the two flats on rent and claim deduction in respect of interest paid in respect of the home loans on the two flats in your return of income.
Taxes & Duties
#flat#mumbai#builder#cost#construction
I had bought a flat in Mumbai for which the builder is asking for service tax on the cost of construction. I wanted to know if this service tax is applicable on us and if yes, what is the % of amount that we will have to pay?
I had bought a flat in Mumbai for which the builder is asking for service tax on the cost of construction. I wanted to know if this service tax is applicable on us and if yes, what is the % of amount that we will have to pay?
Answered on November 08, 2017
Yes, Service Tax is applicable on the service portion in the execution of works contract. Currently, the abated rate of service tax on contract value is 4.5%
Taxes & Duties
#transfer#flat#costs#involved#rent
If I want to transfer my share of a flat that I jointly own with my mother to my wife, what will be the costs involved? Also, after the transfer is complete can I pay rent on this flat and claim HRA exemption in my salary?
If I want to transfer my share of a flat that I jointly own with my mother to my wife, what will be the costs involved? Also, after the transfer is complete can I pay rent on this flat and claim HRA exemption in my salary?
Answered on November 08, 2017
You can transfer your share to your wife by executing a gift deed. Further as the property is being gifted to wife (relative), there will be no tax liability under section 56 of the Income Tax Act. However stamp duty and registration charges needs to be paid in this case.
If the gift deed is executed, any payment of rent received by your wife in respect of the said property will be clubbed in...
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Taxes & Duties
#flat#lakh
I am a 36 years old salaried individual. I bought a flat 7 years ago for 5 lakh and sold it recently for 16 lakhs. I purchased another flat this year for 32 lakhs. How do I file my return?
I am a 36 years old salaried individual. I bought a flat 7 years ago for 5 lakh and sold it recently for 16 lakhs. I purchased another flat this year for 32 lakhs. How do I file my return?
Answered on November 08, 2017
Difference between sale consideration (16 lacs) and indexed purchase cost (5 lacs plus indexation) will be charged as capital gains. Since you are purchasing new residential property of Rs. 32 lacs, the entire capital gains will be exempt u/s. 54 of the Income Tax Act which is available on sale of residential property by investing in new residential property. For ther year under consideration, ...
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Taxes & Duties
#capital#taxable#property#agreement
Is the capital gains taxable if the property is sold after 3 years of the date on the sale agreement?
Is the capital gains taxable if the property is sold after 3 years of the date on the sale agreement?
Answered on November 08, 2017
Yes. The capital gains arising from the sale of property after holding the same for 2 years is taxable as long term capital gains. Indexation will be availble on the purchase cost as the asset is long term capital assets.
Taxes & Duties
#land#capital#payment#sell#exemption
My brother has recently sold some land. He wants to buy my house so that he can minimize his capital gains tax payment. If I sell him my house, will he be eligible to claim exemption on the tax as intended?
My brother has recently sold some land. He wants to buy my house so that he can minimize his capital gains tax payment. If I sell him my house, will he be eligible to claim exemption on the tax as intended?
Answered on November 08, 2017
As your brother is selling land and is willing to acquire residential flat, he can claim the exemption under section 54F of the Income Tax Act which allows purchase of residential property against sale of any long term capital asset. If the cost of property purchased is higher than sale consideration of the land then entire capital gains will be exempt otherwise only proportionate gains will be...
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Taxes & Duties
#mumbai#flat#ideally
I own two flats in Mumbai. One is in Kandivali in my name, and the other is in Goregaon in my wife's name. I want to buy another flat, ideally in whose name should this flat be bought?
I own two flats in Mumbai. One is in Kandivali in my name, and the other is in Goregaon in my wife's name. I want to buy another flat, ideally in whose name should this flat be bought?
Answered on November 08, 2017
If you own both the properties, then the propety held by you in name of your wife in Goregaon is a Deemed Let Out Property (DLOP) in your income by applying clubbing provisions of Income Tax Act. The ideal way to purchase new property is to gift the amount of sale consideration to your wife and then she can purchase the property in her own name then the same can be considered as Self Occcupied ...
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Taxes & Duties
#rules#nri#sell#property#mumbai
I am a Captain in the Merchant Navy and as per Income tax rules I am an NRI. I wish to sell my property in Mumbai that is jointly owned by my wife and I, and invest the proceeds in another property. Is there any TDS to be deducted by the buyer in this situation?
I am a Captain in the Merchant Navy and as per Income tax rules I am an NRI. I wish to sell my property in Mumbai that is jointly owned by my wife and I, and invest the proceeds in another property. Is there any TDS to be deducted by the buyer in this situation?
Answered on November 08, 2017
The property is situtated in India and therefore capital gains tax will arise on this transaction. The buyer will have to deduct TDS as per provisions of section 195 of the Income Tax Act since you are NRI.
Taxes & Duties
#flat#paid#registered#agreement#builder
I bought a flat in NOV- 2009 and paid the registered amount. This falls before march 2010. The agreement of sale provided by the builder does not involve any VAT mentioned. Am I still liable to pay the VAT? If yes, how much? The builder has also filed a civil case and is charging 2.17% of the price of the flat from all the owners. What can be done?
I bought a flat in NOV- 2009 and paid the registered amount. This falls before march 2010. The agreement of sale provided by the builder does not involve any VAT mentioned. Am I still liable to pay the VAT? If yes, how much? The builder has also filed a civil case and is charging 2.17% of the price of the flat from all the owners. What can be done?
Answered on November 08, 2017
In Maharashtra, VAT on sale of underconstructed property brought into effect from June 2006. Hence, builder would be liable to pay VAT on agreement to sale effected in Nov 2009. There are various methods for arriving at the taxable value of transfer of property in goods during construction.
Liability to pay VAT by flat buyer to the builder would be dependent on the contractual arrangement betw...
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Taxes & Duties
#loan#lac
I am planning to buy a house in Bhandup. I will be taking a loan of 30 lac for the same. Now my plan is to either take a prepayment of 10 lac in year or take this 10 lac and make it an FD and use the interest from it to pay the regular home loan emi. Which of these plans is better?
I am planning to buy a house in Bhandup. I will be taking a loan of 30 lac for the same. Now my plan is to either take a prepayment of 10 lac in year or take this 10 lac and make it an FD and use the interest from it to pay the regular home loan emi. Which of these plans is better?
Answered on November 08, 2017
Interest on Housing loan will always be higher than what you earn on Fixed Deposit. Further interest earned on fixed deposit is subjected to income tax. By paying off the loan you will be saved on interest expense. So it is advisable to repay the loan (if the rate of interest is high on the loan in comparison to FD)
Taxes & Duties
#sell#worth#crore#capital#reduce
My father wants to sell one of his houses. He has two houses in his name. He bought this one for INR 40,000 in 1986 and now it is worth 2.25 crore. What would be the capital gains tax he would have to pay and is there any way to reduce it?
My father wants to sell one of his houses. He has two houses in his name. He bought this one for INR 40,000 in 1986 and now it is worth 2.25 crore. What would be the capital gains tax he would have to pay and is there any way to reduce it?
Answered on November 08, 2017
To compute the amount of capital gain, you can refer to the provision of section 48 of the Income Tax Act. Based on the facts provided, as the property has been sold after a period of 24 months, the capital gains would be long term capital gains. Such capital gains would be computed as below:
Difference between Sale consideration (Rs. 2.25 crore) and the indexed purchase consideration (Rs. 40,...
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Taxes & Duties
#flat#mumbai#redevelopment#carpet#builder
I own a flat in Mumbai in a building that went under redevelopment. The original carpet area of the flat was 318 sq ft. After redevelopment the builder has given me 100 sq. ft free of cost and I have purchased another 100 sq. ft from him. So now the total carpet area is 518 sq. ft. The agreement is also registered. I want to know what would be my tax liability and purchase value when I sell the flat?
I own a flat in Mumbai in a building that went under redevelopment. The original carpet area of the flat was 318 sq ft. After redevelopment the builder has given me 100 sq. ft free of cost and I have purchased another 100 sq. ft from him. So now the total carpet area is 518 sq. ft. The agreement is also registered. I want to know what would be my tax liability and purchase value when I sell the flat?
Answered on November 08, 2017
Tax liability will arise on capital gains arising out of difference between sale consideration and purchase consideration. While the sale consideration will be proportionately divided by the area of the flat, the purchase value of your flat will be aggregate of the following:
1. For 318 sq. ft - original purchase value as per agreement.
2. For 100 sq. ft. received free of cost - NIL
3. For 1... (View more)
1. For 318 sq. ft - original purchase value as per agreement.
2. For 100 sq. ft. received free of cost - NIL
3. For 1... (View more)
Taxes & Duties
#buying#flat#registered#agreement#deposit
I am thinking of buying a flat that is in the builder's name as the seller hasn't registered it on his name. The seller has been living in the US for the past 4 years. Now, I am willing to buy this flat under a tripartite agreement and deposit the money in the seller's local account. I want to know if there will be any issue over the Section 195 IT Act later as the seller is stating himself as a non-NRI?
I am thinking of buying a flat that is in the builder's name as the seller hasn't registered it on his name. The seller has been living in the US for the past 4 years. Now, I am willing to buy this flat under a tripartite agreement and deposit the money in the seller's local account. I want to know if there will be any issue over the Section 195 IT Act later as the seller is stating himself as a non-NRI?
Answered on November 08, 2017
The sellers claim that he is a non-resident will not suffice. Residential status has to be detemined as per provisions of section 6 of the of Income Tax Act.
Non Residential status: As per the provision
i) if a person stays in India for less than 182 days in current year then he will be treated as a Non resident in India.
ii) if a persons stay in India for more than 60 days but less than... (View more)
Non Residential status: As per the provision
i) if a person stays in India for less than 182 days in current year then he will be treated as a Non resident in India.
ii) if a persons stay in India for more than 60 days but less than... (View more)
Taxes & Duties
#ancestral#property#mumbai#co-owner#loan
I want to renovate my ancestral property. This property is in my father's name and is in Mumbai. I want to know the most cost-effective way to become the co-owner of this property and claim income tax deduction for the loan borrowed for renovation?
I want to renovate my ancestral property. This property is in my father's name and is in Mumbai. I want to know the most cost-effective way to become the co-owner of this property and claim income tax deduction for the loan borrowed for renovation?
Answered on November 08, 2017
If the said property is your ancestral property then the same is a property of HUF and you are co-owner to the same.
However, if it is property of your father in his individual capacity then the most cost effective way is to make a gift deed and thereby transfer partial ownership as the gift so received will not taxable under the provisions of the Income Tax Act. The Stamp duty and registr...
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Taxes & Duties
#flat#term#capital#property#land
I recently sold my flat. Of the sale proceeds, the long term capital gains are about 19 lakhs. I own other property as well. Can I invest these proceeds in another flat or plot of land to be exempted from LTCG?
I recently sold my flat. Of the sale proceeds, the long term capital gains are about 19 lakhs. I own other property as well. Can I invest these proceeds in another flat or plot of land to be exempted from LTCG?
Answered on November 08, 2017
If you invest the capital gain arising from the sale of residential flat in another residential flat then the provision of section 54 of Income Tax Act shall apply (i.e selling of one residential property and purchasing another residential property within within 1 year before or 2 years after the due date of transfer of the Property sold or construct a residential house property within a period...
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Taxes & Duties
#property#capital#exemption#land
I gave my property of 2 and a half acres for a JV and got 20 apartments out of that. The capital gains tax on this is very high and I wish to get capital tax exemption, how can I do that? Also, which sections should I be cautious about with regards to the land?
I gave my property of 2 and a half acres for a JV and got 20 apartments out of that. The capital gains tax on this is very high and I wish to get capital tax exemption, how can I do that? Also, which sections should I be cautious about with regards to the land?
Answered on November 08, 2017
The capital gains will arise in the year in which the land is transferred to JV. Exemption to the extent of Rs. 50,00,000/- will be available under section 54EC of the Income Tax Act provided you invest in specified bonds or under section 54EE of the Income Tax Act on investing in the units of specified start up funds as notified by central government within a period of six months from the date...
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Taxes & Duties
#society#mumbai#july#capital#lakh
I have sold my society plot in Mumbai in July 2012 and I have capital gain of 10.50 lakh. I don't want to buy a property of this money rather want to invest in tax free bonds. Can you advice as which tax free bonds are good to invest in at what interest rate and locking period?
I have sold my society plot in Mumbai in July 2012 and I have capital gain of 10.50 lakh. I don't want to buy a property of this money rather want to invest in tax free bonds. Can you advice as which tax free bonds are good to invest in at what interest rate and locking period?
Answered on November 08, 2017
Both the tax free bonds notified by Central Government currently i.e. NHAI and RECL have the same lock in period of 3 years and rate of interest of 5.25%. So the capital gains of Rs. 10.50 lakhs can be invested in any of the bonds to claim exemption under section 54EC of the Income Tax Act.
Taxes & Duties
#sell#flat#city#capital#implications
I bought an apartment seven years ago jointly with my husband. Now if I sell this flat and buy another flat in the same city itself, what are the capital gains implications on this transaction?
I bought an apartment seven years ago jointly with my husband. Now if I sell this flat and buy another flat in the same city itself, what are the capital gains implications on this transaction?
Answered on November 08, 2017
There would be no capital gain tax if you sell the old residential flat and buy another residential flat as the capital gains can be claimed exempt u/s. 54 of the Income Tax Act. The exemption will be to the extent of investment in the new residential flat or the long term capital gains arising on sale of old flat, whichever is lower. If the investment is lower than the long term capital gains,...
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Taxes & Duties
#flat#mhada#mumbai#possession#expected
My wife won a flat in a lottery by MHADA in Mumbai. This was in 05/2012. The possession is expected to be given to us soon, 95% of the payment is done. My questions is that will the TDS @1% be applicable after the final payment or otherwise?
My wife won a flat in a lottery by MHADA in Mumbai. This was in 05/2012. The possession is expected to be given to us soon, 95% of the payment is done. My questions is that will the TDS @1% be applicable after the final payment or otherwise?
Answered on November 08, 2017
As per section 194IA of Income Tax Act, the transferee is required to deduct TDS @ 1% at the time of credit of sum to the account of the transferor or at the time of payment of such sum if the total consideration is 50 lakhs or above. The said section was introduced w.e.f 1st June, 2013. Accordingly any payment made by you on or after 1st June, 2013 and if your purchase consideration is more th...
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Taxes & Duties
#flat#mumbai#selling#pune#avoid
We wish to buy a flat in Mumbai after selling our flat in Pune. The flat in Pune is in my mother's name, we want to avoid capital gains, so is it advisable for my mother and father to have a joint ownership? Also, if this happens will it impact the exmeption claimed by my mother on the property?
We wish to buy a flat in Mumbai after selling our flat in Pune. The flat in Pune is in my mother's name, we want to avoid capital gains, so is it advisable for my mother and father to have a joint ownership? Also, if this happens will it impact the exmeption claimed by my mother on the property?
Answered on November 08, 2017
Since the Pune Flat is owned by your mother, capital gains will arise to your mother. By investing in another residential flat exemption u/s. 54 of the Income Tax Act can be claimed upto a value of subsequent purchase.
Further the Mumbai flat can be purchased in joint ownership of your mother and father. Joint ownership will not have any impact on exemption that will be available to your mothe... (View more)
Further the Mumbai flat can be purchased in joint ownership of your mother and father. Joint ownership will not have any impact on exemption that will be available to your mothe... (View more)
Taxes & Duties
#vat#paid#agreement#builder#flat
I have a doubt on the VAT to be paid on an agreement value. My builder is asking me to pay 5% VAT on the agreement value for a flat bought in June 2008. Please suggest as to who is liable to pay the VAT and how much should it ideally be?
I have a doubt on the VAT to be paid on an agreement value. My builder is asking me to pay 5% VAT on the agreement value for a flat bought in June 2008. Please suggest as to who is liable to pay the VAT and how much should it ideally be?
Answered on November 08, 2017
In Maharashtra, VAT on sale of underconstructed property brought into effect from June 2006. Hence, builder would be liable to pay VAT on agreement to sale effected in June 2008. There are various methods for arriving at the taxable value of transfer of property in goods during construction.
Libality to pay VAT by flat buyer to the builder would be dependent on the contractual arrangement betw...
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Taxes & Duties
#flat#offer#taxable#taxes#sell
I bought a flat in Coimbatore for 11 lakhs in 2007.Now, I have an offer of Rs 21 lakhs for the flat. Is the difference amount taxable? If yes then what would be the taxes I would have to pay? I wouldn't be willing to sell it if the taxes are too high. Please advice me as soon as possible, thanks.
I bought a flat in Coimbatore for 11 lakhs in 2007.Now, I have an offer of Rs 21 lakhs for the flat. Is the difference amount taxable? If yes then what would be the taxes I would have to pay? I wouldn't be willing to sell it if the taxes are too high. Please advice me as soon as possible, thanks.
Answered on November 08, 2017
Tax liability will arise on capital gains arising out of difference between sale consideration and purchase consideration. The said gains will be considered as long term capital gains or short term capital gains based on the period of holding of the property. If the property is held by you for a period more than 24 months than the same will be long term else short term. Assuming that the sale w...
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Taxes & Duties
#construction#property#mumbai#allotted#builder
If I buy an under construction property in Mumbai which was earlier allotted by the builder to the land owner, through a tripatriate agreement with the land owner and the builder, is VAT payable on this transaction? What would be the GST implications?
If I buy an under construction property in Mumbai which was earlier allotted by the builder to the land owner, through a tripatriate agreement with the land owner and the builder, is VAT payable on this transaction? What would be the GST implications?
Answered on November 08, 2017
VAT would be payable by the builder on flats allotted to land owners. Subsequently when the land owner sells flats to third party, no VAT would be paybable by the land owner on such subsequent sale.
Construction of a complex, building, civil structure etc intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certi... (View more)
Construction of a complex, building, civil structure etc intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certi... (View more)
Taxes & Duties
#booked#flat#possession#sell#capital
I booked a flat in 2010 and got possession in 2013. If I sell the flat now, will it attract capital gains tax? Which date is considered to be the purchase date?
I booked a flat in 2010 and got possession in 2013. If I sell the flat now, will it attract capital gains tax? Which date is considered to be the purchase date?
Answered on November 08, 2017
Yes, tax liability will arise on capital gains arising out of difference between sale consideration and purchase consideration.
As far as rate is concerned, tax will be computed @ 20% plus surcharge (if any) on long term capital asset held for more than 24 months. While tax rate will be 30% plus surcharge (if any) if the asset is a short term capital asset.
As far as date of purchase is ... (View more)
As far as rate is concerned, tax will be computed @ 20% plus surcharge (if any) on long term capital asset held for more than 24 months. While tax rate will be 30% plus surcharge (if any) if the asset is a short term capital asset.
As far as date of purchase is ... (View more)
Taxes & Duties
#flat#allotted#purchase#consideration#paid
I applied for a flat which was allotted three months later, entire purchase consideration was paid by me in instalments. Possession is not yet offered by the developer. I have entered in an agreement to sell, I have received the advance and will receive the balance amount soon. How can I calculate the tax liability on this?
I applied for a flat which was allotted three months later, entire purchase consideration was paid by me in instalments. Possession is not yet offered by the developer. I have entered in an agreement to sell, I have received the advance and will receive the balance amount soon. How can I calculate the tax liability on this?
Answered on November 08, 2017
Tax liability will arise on capital gains arising out of difference between sale consideration and purchase consideration. The said gains will be considered as long term capital gains or short term capital gains based on the period of holding of the property. If the residential flat is held by you for a period more than 24 months than the same will be long term else short term. Indexation needs...
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Taxes & Duties
#flat#save#taxes#consideration#loan
I had one flat which I sold and to save taxes, I purchased another flat partially from the sales consideration received and partially by taking loan. Now, if I sell this flat within period of 3 years of purchase then on what amount am I liable to pay taxes?
I had one flat which I sold and to save taxes, I purchased another flat partially from the sales consideration received and partially by taking loan. Now, if I sell this flat within period of 3 years of purchase then on what amount am I liable to pay taxes?
Answered on November 08, 2017
In order to save tax on capital gains arising out of sale of residential flat, expemtion can be claimed under section 54 of Income Tax Act i.e selling of one residential property and buying another residential property within the time limit specified under section 54 of the Income Tax Act. The new residential property so purchased should be held by you for subsequent period of 3 years. In case ...
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Taxes & Duties
#save#taxes#property#flat#crore
In what way can I lawfully save taxes on property in two scenarios related to my flat. Scenario one, the value of my flat is 1 crore and I want to sell this and buy a new flat in Mumbai. Scenario two, I sell my flat and want to keep the money without investing it again in a property. Please suggest.
In what way can I lawfully save taxes on property in two scenarios related to my flat. Scenario one, the value of my flat is 1 crore and I want to sell this and buy a new flat in Mumbai. Scenario two, I sell my flat and want to keep the money without investing it again in a property. Please suggest.
Answered on November 08, 2017
Under scenario 1, if you sell your residential flat and invest the capital gain arising therefrom in another residential flat then the provisions of section 54 of Income Tax Act would apply i.e selling of one residential property and buying another residential property within the time limit specified under section 54 of the Income Tax Act will apply and capital gains so arised shall be exempted...
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Taxes & Duties
#agreement#registered#taxes#transactions
I sold my old house for 19 lakhs for which the sale agreement was done in April 2012 and registered in September 2012. In October 2012, I bought a new house for 25 lakhs. Do I have to pay taxes on any of these transactions?
I sold my old house for 19 lakhs for which the sale agreement was done in April 2012 and registered in September 2012. In October 2012, I bought a new house for 25 lakhs. Do I have to pay taxes on any of these transactions?
Answered on November 08, 2017
It seems that your case very well fits within the provisions of section 54 of Income Tax Act i.e selling one residential property and buying another residential property within the time limit specified under section 54 of the Income Tax Act. Thus there will be no capital gain tax liability and you need not pay any taxes. Further the new residential property so purchased should be held by you su...
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Taxes & Duties
#flat#under-construction#property#landlord#builder
I recently purchased a flat which is in an under-construction property. The landlord and builder own half the flats each as per the JDA. The flat I am purchasing is from the landlord. He is not going to pay VAT and ST on this transaction, maybe he will pay capital gains tax. In such a situation, will the new law of cutting 1% TDS be applicable to me?
I recently purchased a flat which is in an under-construction property. The landlord and builder own half the flats each as per the JDA. The flat I am purchasing is from the landlord. He is not going to pay VAT and ST on this transaction, maybe he will pay capital gains tax. In such a situation, will the new law of cutting 1% TDS be applicable to me?
Answered on November 08, 2017
Yes, the provision of section 194IA of the Income Tax Act will be applicable in this case and accordingly if the consideration to be paid is 50 lakhs or above then TDS @ 1% is required to be deducted.
Taxes & Duties
#property#registered#construction#possession#loan
Will it be possible for me to get a property registered under my wife's name which I bought when it was under construction and for which the possession is due in August 2017. I bought the property by taking some loan and by adding my own funds as well. I want to gift this property to my wife while keeping the loan under my name only. Also, are there any tax implications for this service?
Will it be possible for me to get a property registered under my wife's name which I bought when it was under construction and for which the possession is due in August 2017. I bought the property by taking some loan and by adding my own funds as well. I want to gift this property to my wife while keeping the loan under my name only. Also, are there any tax implications for this service?
Answered on November 08, 2017
It is permissible to gift the under construction property to your wife by way of a gift deed.
Further as the property is being gifted to wife (relative), there will be no tax liability under section 56 of the Income Tax Act. However stamp duty and registration charges needs to be paid as per prevailing state laws.
However clubbing provisions with regards to any income arising from the s... (View more)
Further as the property is being gifted to wife (relative), there will be no tax liability under section 56 of the Income Tax Act. However stamp duty and registration charges needs to be paid as per prevailing state laws.
However clubbing provisions with regards to any income arising from the s... (View more)
Taxes & Duties
#reduce#capital
Is it possible to reduce the tax burden on homes? What are the ways of calculating the capital gain tax?
Is it possible to reduce the tax burden on homes? What are the ways of calculating the capital gain tax?
Answered on November 08, 2017
Tax burden can be reduced on capital gains arising on sale of residential property by claiming exemption under section 54 or 54EC or 54EE of the Income Tax Act by fulfilling the condition prescribed in the sections.
Exemption u/s. 54 of the Income Tax Act can be claimed by investing the capital gains in purchase of new residential flat.
Exemption of capital gains to the extent of Rs. 50... (View more)
Exemption u/s. 54 of the Income Tax Act can be claimed by investing the capital gains in purchase of new residential flat.
Exemption of capital gains to the extent of Rs. 50... (View more)
Taxes & Duties
#applicable#registration#purchasing#flat#stampduty
What would be the applicable registration fees and stamp duty while purchasing a flat?
What would be the applicable registration fees and stamp duty while purchasing a flat?
Answered on November 08, 2017
Stampy Duty and Registeration fees will depend on the stamp duty provisions of each State. For Maharashtra, the rates are as below:
a) The stamp duty rate will be 5% of the agreement value or market value (computed as per the ready reckoner rate of the area), whichever is higher
b) Registration fees will be 1% on the market value or the agreement C72value but restricted to Rs. 30,000. (View more)
a) The stamp duty rate will be 5% of the agreement value or market value (computed as per the ready reckoner rate of the area), whichever is higher
b) Registration fees will be 1% on the market value or the agreement C72value but restricted to Rs. 30,000. (View more)
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