| |
| Fema | Income Tax |
| Income Tax |
| 1. |
Income From House Property |
|
A. |
In the case of Let Out Property [Whether for residential purpose or for business purpose]
|
|
|
|
The annual value of any property shall be deemed to be |
|
|
i) |
The sum for which property might reasonably be excepted to let from year to year or |
|
|
ii) |
When property or part of property is let, the annual rent received / receivable less unrealised rent or the sum as above whichever is higher. |
|
|
iii) |
Where property or part of it is let and was vacant for whole or part of year & due to such vacancy the actual rent received/ receivable is less than the sum as per (i) above, then the amount so received/ receivable. |
|
| All assesses are eligible for following deductions in computing Income from House Property. |
| Nature of Deduction |
Section |
Limit / Condition |
| 1. |
Municipal Tax, etc. |
To be reduced from Annual value |
Only if borne and actually paid by the owner |
| 2. |
Standard Deduction |
24 Clause (a) |
30% of Annual Value. |
| 3. |
Interest on Borrowed capital |
24 Clause (b) |
On accrued basis and capital borrowed for the purpose of acquisition, construction, repair, renew or reconstruction only. Interest for the period prior to acquisition or construction would be deductible in five equal installments from the year of acquisition or construction. |
| 4. |
Unrealised rent |
To be reduced from Annual value. |
Subject to conditions contained in Rule 4. |
| B. |
In the case of one self-occupied house property. |
| The annual value of a self-occupied house or part of such house shall be nil. Further deduction shall be allowable as under: |
| Deduction |
Section |
Limit / Condition |
| Deduction of interest on borrowed capital (including interest on New loan taken for repaying borrowed capital from A. Y. 2003-04) shall be allowable |
24 Clause (b) |
On accrued basis, RS. 30,000 except RS. 75,000 for A. Y. 2000-2001, RS. 1,00,000 for A. Y. 2001-2002 and RS. 1,50,000 for A. Y. 2002-2003 if property is acquired or constructed with capital borrowed on or after 1. 4. 1999 and such acquisition or construction is completed within 3 years from the end of the financial year in which capital was borrowed and on furnishing a certificate of interest payable from the lender is furnished by the assessee. No other deductions allowed in respect of one self-occupied property whose value is taken at RS. NIL. |
| C. |
In the case of more than one self occupied house property. |
|
Only one house according to assessees choice is treated as self-occupied and deduction mentioned in B will be allowed. In respect of all other houses, even though self-occupied , notional income will have to be computed. In such cases, all deductions mentioned in A would be available. |
| D. |
Special provisions relating to income from property held by a non-resident (section 115E). |
|
A non-resident Indian if he so choose can pay income-tax at a flat rate of 20% of any income derived by him by way of rent or compensation for property held in India provided the property has been acquired or purchased with convertible foreign exchange |
|
| 2. |
Capital Gain on transfer of Capital Asset |
| Section |
Capital Asset Transferred |
Assessee |
Holding period of Original Assets |
Whether reinvestment necessary - Time limit |
Other Conditions / Incidents |
Quantum of Deduction |
| 54 |
Residential House property |
Individual HUF |
3 years |
Yes In Residential House, within 1 year before, or 2 years after the date of transfer (if purchased) or 3 years after the date of transfer (if constructed) |
See Notes 1,2,7 & 9 |
The amount of capital gains, or the cost of new asset, whichever is lower. |
| 54EC |
Any long-term Capital Asset (LTCA) |
Any Assessee |
Shares, Listed Securities, Units of UTI Mutual Fund covered u/s. 10 (23D): 1 year Others: 3 years |
Yes Whole or any part of Capital gain in specified assets as may be notified by the Board within 6 months from the date of transfer. |
See notes 10 and 11 |
The amount of capital gain or the cost of new asset whichever is lower. |
| 54ED |
LTCA being listed securities or units |
Any assessee |
Shares, Listed Securities, Units of UTI Mutual Fund covered u/s. 10 (23D): 1 year Others: 3 years |
Yes - within six months from the date of transfer in acquiring eligible issues of capital. |
See Notes 11 and 12 |
The amount of capital gain of new asset which ever is lower. |
| 54F |
Any capital Asset (not being residential house) |
Individual HUF |
Shares, Listed Securities, Units of UTI Mutual Fund covered u/s. 10 (23D): 1 year Others: 3 years |
Yes In Residential House, within 1 year before, or 2 years after the date of transfer (if purchased), or 3 years from the date of transfer (if constructed). |
See Notes 2, 3, 4, 7 and 9 |
If the cost of the specified asset is not less than Net Consideration of the Original asset, the whole of the capital gains. If the cost of the specified asset is less than the Net Consideration, the proportionate amount of the capital gains. |
| 115F |
Foreign Exchange Asset (see Note 7) |
Non-Resident Indian |
Shares, Listed Securities, Units of Mutual Fund covered u/s. 10 (23D): 1 year Others: 3 years |
Yes In Specified Assets (See Note 8) or Specified Saving Certificates of Central Government, within 6 months after the date of transfer. |
See Notes 5, 6 and 10 |
Same as u/s 54F above |
| Notes: |
| 1. |
If the new asset is transferred, within a period of 3 years from the date of purchase / construction , the cost shall be reduced, in the year of transfer, by the gains exempted earlier. |
| 2. |
If the gains are not reinvested as specified, before the due date of filing the return u/s. 139 (1), then the amount not so reinvested is required to be deposited on or before that date in account in a specified bank/ institution and utilised for the purchase/ construction of the relevant asset in accordance with the notified scheme within specified time limit in order to continue availing of the benefit of exemption [For the notified scheme, See 172 ITR (St.) 91]. |
| 3. |
The assessee must not own more than one residential house other than the new house on the date of the transfer of the original asset. |
| 4. |
The assessee must neither purchase within two year after or construct within three years, after the day of transfer, any other residential house other than the one in which re-investment is made nor transfer the new asset within 3 years from the date of its acquisition/ construction, otherwise the amount of gains earlier exempted shall be deemed to be LTCG in the year of such transfer. |
| 5. |
Foreign Exchange Asset means any of the assets listed in Note 6 below which assessee has acquired or purchased with, or subscribed to in convertible foreign exchange. |
| 6. |
A Specified Asset u/s. 115F means: |
| |
(i) |
Share in an Indian Co.; |
| |
(ii) |
Debentures issued by Indian Co. which is not Pvt. co.; |
| |
(iii) |
Deposits with an Indian Co. which is not a private co.; |
| |
(iv) |
Any security of the Central Government as defined in S.2 (2) of the Public Debt Act; |
| |
(v) |
Other notified assets. |
| 7. |
In case of compulsory acquisition of asset under law, time for reinvestment or deposit in specified assets, of sale proceeds or capital gains as the case may be, as prescribed by Ss. 54, 54B, 54D, 54F, 54EA, and 54EB w.e.f. 1999-2000 shall be reckoned from the date of receipt of compensation as per provisions of S. 54H introduced W.E.F. 1.10.1991. |
| 8. |
Board Cir.No 471 dtd 15.10.1986 (162 ITR (St) 41) has clarified that cases of allotment of flats under the self financing scheme of the Delhi Development Authority (DDA) should be treated as cases of construction for the purposes of Ss. 54 and 54F. Similarly, the Board of Cir. No .672 dtd 16.12.1993 (205 ITR (St) 47) has clarified that allotment of flats/ houses by co-op. Societies and other institutions, whose schemes of allotment and construction are similar to those of DDA (as mentioned para 2 of aforesaid Cir. No. 471), would be treated as 'constructed' for the purpose of Ss. 54 & 54F. |
| 9. |
Board Cir. No. 667 dtd 18.10.1993 (204 ITR (St) 103) has clarified that for the purpose of computing exemption u/s 54 or 54F , the cost of the plot together with cost of building will be considered as cost of new asset, provided the acquisition of the plot and also the construction thereon are completed within period specified in these sections. |
| 10. |
Where the new asset is transferred within 3 years from date of its acquisition, or converted into money or any loan/ advance is taken on securities of specified bond, the amount of gains earlier exempted shall be deemed to be LTCG in the year of such transfer or conversion. |
| 11. |
Cost of specified asset shall not be considered for rebate u/s. 88. |
| 12. |
Where new asset is transferred within 1 year from date of its acquisition, amount of gains earlier exempted shall be deemed to be LTCG in the year of such transfer. |
|
