On or before July 31, 2018, you will need to deposit the amount of taxable capital gains only (not the entire sales proceeds) in a capital gain account scheme account which is available with most public sector banks
I have purchased a flat in joint name with my wife in June 2002 at Mulund West, Mumbai at a price of Rs 11 lakh. Now, I want to sell the flat and buy another flat only after two years. Need your help and legitimate suggestion in terms of various taxation on the deal if the new flat is not purchased in next six months or so.
- Rajesh M Shah
You have not provided many vital details. So I am making some assumptions.
You will sell the flat sometime in December 2017 and buy a new ready to move in flat only in December 2019. The cost of the new flat will not be less than the amount of capital gains that you will be calculated on the sale of the old flat. Based on these assumptions the answer is as follows:
The indexed cost of your flat in Mulund will be around Rs 28.50 lakh and the taxable capital gains will be calculated after reducing this amount from the net sales proceeds from the flat. You can use the proceeds of the flat freely till July 31, 2018. On or before July 31, 2018, you will need to deposit the amount of taxable capital gains only (not the entire sales proceeds) in a capital gain account scheme account which is available with most public sector banks. This deposit is essential before that date to make sure you do not loose the benefit of capital gain exemption. You will need to buy the new flat within two years of transferring the Mulund flat and you can withdraw the amount from the capital gain account scheme for the purpose of making the payment for the purchase. If you follow this process, you should be able to claim full exemption of the capital gains chargeable on the sale of the Mulund flat.
Just a word of advise. Seek professional help from your tax advisor as he may suggest other options to save tax if the only reason you are buying a new flat is to save on capital gains tax. Also choose a fixed deposit option under the scheme that pays interest rather than cumulates interest. Choose the tenure with care depending on your proposed date of purchase of new flat.
I am in the process of registering a flat purchased in Mumbai that has a carpet area of 650 square feet. I am not married and my income is Rs 5.2 lakh per annum. While I currently do not own a flat in India, my parents do. My parents’ income is Rs 5.5 lakh per annum. My mother is a co owner of the current flat that I live in along with my father. Would like to know that if my mother becomes the co-owner of the flat that I purchase, will I be eligible for Pradhan Mantry Awaas Yojana (PMAY) scheme, since I do not own a house?
- Aaron D’Souza
Since you are not married and your personal income is below Rs 6 lakh per annum you cannot independently qualify for the middle income group scheme of the PMAY which is for those whose income is above Rs 6 lakh per annum. You also do not qualify for the lower income group scheme as well as the economically-weaker section of the scheme since the joint income of your parents and yourself is above Rs 6 lakhs and in any case your parents already own a house.
I am a retired naval pensioner and is Pucca and true Indian residing in India. I will be getting arrears of my legitimate pension with effect from January 15, 2004 amounting Rs 30 lakh plus, orders have been issued to the bank after winning the case in Supreme Court. I am a regular tax payer since late 1960 and have records of filings. I have already catered one-third of this bonanza for income tax and remaining Rs 20 lakh equally gifted to my son (in India) and daughter in (Dubai). How do I go about correcting income tax for the last 15 years as the pension was less in years 2004 and I was in lower tax bracket. The pension increased with subsequent years----does it mean that I refile my tax with effect from 2004? Lastly, I was really scared to read the word Fema (Foreign Exchange Management Act) ---I hope I never come close to any case under Fema.
- Sagar Malhotra
You do not have to worry about recalculating past income-tax returns. Your tax advisor will assist you in using section 89 to appropriately claim relief in this year's returns itself in respect of your pension arrears. Your old income-tax records will be needed by the tax advisor to work out the tax relief under section 89. Please do not worry about Frma. It does not concern you as you have so correctly pointed out.
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