The value of such perquisite is determined separately for governmental and non-governmental employees basis the furnished and unfurnished accommodations as specified by the Income-tax Act, 1961
My company is providing me a rented accommodation since I was transferred to Mumbai. The company is paying the rent directly to the landlord. But the rent is shown as part of my CTC. Will I have to pay tax on this rent?
– Arunchandra Basu
Rent free accommodation provided by the employer to employee is chargeable to tax as a perquisite under the head salary. Thus, you shall be required to pay tax on the same. The value of such perquisite is determined separately for governmental and non-governmental employees basis the furnished and unfurnished accommodations as specified by the Income-tax Act, 1961.
If I take a top-up home loan on my existing home loan, will I get tax benefit on that?
– Rohan Shukla
Tax benefits in the case of top-up loans depends upon the end usage of the funds. If the funds are borrowed for undertaking repair/ renovation or alteration of the property, only the interest payment would qualify for deduction while computing income from house property for the relevant year . Whereas, in case if the loan proceeds are used for construction or purchase of a house property, then deduction will be available in respect of interest while computing income from house property and for the principal component under 80C while computing total income for the relevant assessment year up to the threshold limit as prescribed.
I am am planning to buy a flat in Mumbai. My dad is a senior citizen in Pune. He will sell his house in Pune give me that money for the house. I will also take a loan. Will I have to pay tax if he gives me this money? Should we buy the flat jointly?
– Shravan Datta
Any sum of money received by an individual from other in excess of Rs. 50,000 without consideration is chargeable to tax as income from other sources under section 56 of the Income Tax Act,1961 (Act) in the hands of recipient. However, exemption from payment of such tax has been provided if the payment is made between the persons qualifying as relatives as per the definition specified under the Act. The relationship of father and son falls under the said definition of relatives. Thus, you shall not be liable to pay any tax on the amount transferred by your father to you. In case you buy the flat jointly with your father, your father may offset the capital gain arising on the sale of old house with the purchase of the new house to the extent of investment made by your father. Further, the tax liability on the new house purchase (if any) and the resultant, tax benefits will be shared in the ratio of ownership held by you and your father in the new house purchased.
I am an NRI based in Singapore. I have some land that my mother gave me. Now she is no more and I don't plan to return to India. I want to sell the land. I don't pay tax in India as of now. If I sell the land will I have to pay tax? What will be the tax amount? Can I receive the money in my NRE account and transfer it to Singapore since my husband is a Singapore citizen and I don't plan to come back to India
– Sreelata Vasan
Sale of inherited property by NRI to a resident attracts the provisions of Income tax. The capital gains for this purpose shall be computed by reducing from the sale proceeds, the indexed cost of acquisition and indexed cost of improvement. The gains shall be taxable @20%. You can avail tax benefits by investing the capital gains in certain specified bonds or in acquisition of new residential house in India. We are presuming that you have acquired the land under inheritance from your mother who was an Indian resident at the time of purchase. Also, the land may be sold to a resident Indian or to a NRI only if the land is to be used for a purpose other than agricultural, farm houses or plantation. Funds from disposal of such land may be transferred into the NRO account and remitted outside India up to a limit of USD 1 million per financial year. You cannot receive funds in the NRE account.
Chirag Nangia, Director, Nangia Advisors (Andersen Global)
Send your queries related to personal tax to personalfinance@dnaindia.net.
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