REVERSE SECTION 80C BENEFIT OF HOME LOAN

Friends,

Under Income Tax Act there is a provision for a rebate u/s 80C for Home Loan taken for Construction of house. But if someone sales the house in question within 5 years the benefit taken on this regard will be reversed. Some questions regarding this are given below :-

I had purchased a house in an under construction building in the March 2006. Had taken a loan from HDFC for the same. Got the possession of the house in November 2006.Having paid all the respective dues to the builder we starting paying the EMI to HDFC from April 2006 onwards to HDFC bank.

I have sold this property in the month of January 2010.

Qtn 1. please advised if this comes under short term capital gains or long term capital gains

Qtn: 2, In 2009 August we bought a house taking a fresh loan from HDFC bank.can I use the money from the above sale to pay of this loan and waive of the tax.

Qtn:3 I already have one property in my name, can I buy a second property to waive of the tax

Qtn 4 : alternative, i can buy land in my home town.

Point wise answer to your queries is given here under.


Ans1:You have given followings facts.

   1. Under construction house Purchased in March,2006
   2. Possession of the House has been taken in November,2006
   3. Loan Repayment to HDFC has been started in April ,2006
   4. Due to Seller /Builder has been Given By April 2006

From this facts ,I can conclude that the Property has been transferred in March 2006 it self , as the Bank provides Loan only after registration on your Name .So purchase date I assume that in March 2006.Now you have sold the House in January ,2010 so total holding period is more than 3years(Jan,2010-March ,06) ,so the Capital gain is Covered under Long Term Capital Gain.Even if Date of purchased is considered as November 2006(Jan,2010-November,2010) ,then also it is covered under Long term capital Gain.


Ans:2 Long term capital gain on House transfer ,can be saved by Individual under section  54,the detail of the section are

Capital gain arising from sale of above said property will be saved up to the amount used in

    to purchase a residential house within year before the date of transfer of old house or

    Purchase a residential House within two year after the date of transfer of old house.

    or construct a house with in three year from date of transfer of old house property.


Capital gain is saved up to the amount which is used in to buy /construct new house,if amount used for house purchased/construction is less than the amount of capital gain than the balance amount will be taxed as long term capital gain.In Simple words ,the requirement under this section is to Invest only amount up to Capital gain and not Total Net Sale proceed Collected from house sold .

As given above as per section 54 ,New house can be purchased within one year before the transfer of new House.In your case you have sold House in Jan,2010,so House purchased in August ,2009 is eligible for Exemption under section 54.Further if you repays the HDFC bank loan taken on new house then the same amount will be eligible for exemption under section 54.

Ans 3: The section 54 is applicable where you have sold a house and after that invested the Long term capital gain in New house.Under section 54 there is no bar on number of houses you have or on houses purchased in future.The restriction on number of houses is placed under section 54F.Even in section 54F ,you can purchase new house ,if you already have another house on your name(read 54 F from here).This section(54F) is applicable where the Asset sold is other than House . (read Section 54F Vs 54EC from here).The only restriction under 54 is that if you will sell the New house before 3 years of purchase then the cost of that house will be reduced by the capital gain exempted on sale of original(OLD) house.

Ans-4:Yes you can also Invest amount in Land but condition is that you will construct a house on that land with three years from the date of sale of old house .So in your case construction should be completed by Jan ,2013 on that land.Further if amount invested in land is less than the capital gain amount on sale of House (sold in Jan ,2010) then to claim exemption in this year ,you have to deposit Balance amount in Capital gain account scheme ,1988 before the due date of Return .In case of individual due date in non audit cases is 31st July .

Example: Suppose you have Long term capital gain on your house sold in Jan,2010 is 20 Lacs.And Land proposed to be purchased is Just of 12 Lacs then to save complete Capital gain you have to deposit 8 Lakhs in capital gain account scheme by 31st  July ,2010.Further You have to use amount deposited in capital gain scheme by Jan , 2013.Otherwise unused amount will be taxable in Fy 2012-2013. (read section 54 Details here)

Reverse Of section 80C benefits

One more point ,I would like to point out here that  as Per section 80C ,if a person is claiming House loan repayment benefit under section 80C and have sold the House within 5 years from thr end of Financial year in which House has been purchased then all the benefit availed under this section (80C) of earlier years will be reversed and included in the taxable income of the year in which house has been sold.
In your case you have purchased house in March ,2006 and sold the same in Jan,2010 means before the expiry of the five years from the purchase of the house , so tax benefit  (if any ) on repayment of house loan)availed by you under section 80C ,In Financial year 2006-07,2007-08,2008-09 will be revered in Financial year 2009-10 and no benefit in Financial year 2009-10 in respect of old house .So keep this point in Mind .

Don't Download any thing before free Registration on the TOP of this site and check your Inbox for clicking on activation link of Feed Burner.

Who can claim deduction of Housing Loan u/s 24 ?

Friends,

A very common question regarding repayment of Housing Loan Interest and Principal amount is Who can claim the deduction under section 24 on account of Interest and 80C for Principal amount when property is in the name of spouse and EMI is paid by the Husband or wife vice-versa. Here is example of the same.

Q. My wife is owning a property in his maiden name &  after marriage I am paying the EMI of the flat as she is not earning. The Tax certificate which we receive from the Bank is on her Maiden name. So as i am paying the EMI is there any option where i can get the Tax benefit as i am the husband & if yes. Please guide for the same.

ANS. Since the interest is deducted for the annual value taxable in the hand of owner of the house property , whatever deduction is to be given in case of property you are referring , shall be to your wife only. The simple reason is that she is the owner of the property and income from house property is chargeable only in her hand.

That is true even if the EMI is paid by you . At best those EMI is loan in your wife hand. In my opinion , you are not eligible for claiming the interest.

Don't Download any thing before free Registration on the TOP of this site and check your Inbox for clicking on activation link of Feed Burner.

Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) Recruitment 2011

Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) Vacancy Notification

Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) has invited the application for recruitment to the posts of Assistant Manager and Industrial Workman Grade-I (Trainee). Those who are looking for the jobs opportunity in BRBNMPL they can apply against the current vacancy.

Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) has advertised for filling up 22 posts of Assistant Manager and 57 posts of Industrial Workman Gr-I (Trainee). Those who wants to apply against the current vacancy of Assistant Manager and Industrial Workman in BRBNMPL they can visit the official website of Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) for downloading the advertisement details and instructions.

Enter your EMAIL address on the TOP of this site for Free Jobs Alers.

Assistant Manager

No. of Posts : 22

Industrial Workman Gr-I (Trainee)

No. of Posts : 57

Last Date : 25 April 2011

Those who wants to apply against the posts of Assistant Manager or Industrial Workman in BRBNMPL they can download the advertisement notification and vacancy details from the link given below.

BRBNMPL Website : www.brbnmpl.co.in

Download Advertisement 

Download Application Form

Duly filled in application form and complete in all respect for the posts of Assistant Manager & Industrial Workman Grade-I (Trainee) they must apply in the prescribed format which can be downloaded by visiting the link given above.

Address for Sending Application Form for the Post of Assistant Manager and Industrial Workman Gr-I (Trainee) in BRBNMPL :

Bharatiya Reserve Bank Note Mudran (P) Ltd., Post Box No. 7744, Borivali (West), Mumbai (Maharashtra)

Pin Code – 400092

Don't Download any thing before free Registration on the TOP of this site and check your Inbox for clicking on activation link of Feed Burner to get regular updates and JOB ALERTS.

Notification No. 18/2011-Central Excise - Exempts perfumes commonly known as “Attar”

Notification No. 18/2011-Central Excise, New Delhi, the 1st March, 2011

(READ FULL STORY ON BUDGET 2011-12)    Print your Salary Statement HERE

(MAJOR HIGHLIGHTS OF UNION BUDGET 2011-12)   For Slab rates F/Y 2011-12 Click Here

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act,1944 (1 of 1944) (hereinafter referred to as the Act) , the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts perfumes commonly known as “Attar” falling under Chapter 33 of the Central Excise Tariff Act, 1985 (5 of 1986), when removed from a premises from where such goods are sold in retail, after being subjected to any of the processes referred to in Note 5 of the said Chapter from the whole of the duty of excise leviable thereon subject to the following conditions, namely:-

i. the manufacturer pays the duty leviable on such goods but for this exemption at the time of removal of the goods in bulk from his factory on the value at which such goods are sold in retail to the consumer ;

ii. he maintains proper account of the quantity of goods removed in bulk from his factory which are intended for sale in retail after subjecting them to any of the said processes; and

iii.  follows such procedure as may be determined for the purposes of conditions (i) and (ii) by the jurisdictional Commissioner of Central Excise.

Explanation.- For the purposes of this notification, the value for purposes of payment of duty under condition 

(i) shall be −

a.  the value declared in terms of section 4A of the Act read with notifications issued thereunder where the retail sale price is affixed on the product; or

b. deemed to be the price at which such goods are sold in retail at the time nearest to the time of removal of the goods in bulk from the factory, in any other cases.

Don't Download any thing before free Registration for Job Alerts on the TOP of this site and check your Inbox for clicking on activation link of Feed Burner.