Report Wire

Tag: residential house

  • Income tax implication of promoting a home taken with residence mortgage

    I bought a 2-bedroom flat in Mumbai in December, 2018 by residence mortgage from HDFC. Since then I’m availing tax rebate on compensation of mortgage and curiosity. Now I wish to promote this flat to buy one other three mattress room flat. Will I’ve to return the tax advantages availed from December, 2018 until date if I promote this flat? What are the opposite tax implications of the proposed transaction?

    As per Section 80 C of the Income Tax Act, in case you promote a home, bought with residence mortgage, inside 5 years from the top of the yr through which it was so bought, all the advantages in respect of compensation of such residence mortgage availed beneath Section 80 C shall turn into taxable within the yr through which you promote such flat. So in your case any quantity of principal compensation claimed beneath Section 80 C shall turn into taxable through the yr of sale. Please observe that there isn’t any comparable provision for levying earnings tax in respect of tax advantages claimed for curiosity on residence mortgage. So any tax profit claimed by you beneath Section 24(b) in respect of curiosity shall not turn into taxable now.

    Since you might be promoting the home after finishing 24 months, income if any made on this shall be handled as long run capital positive factors. As per Section 54 of Income Tax Act long run capital positive factors on sale of a residential home are exempt if the capital positive factors are invested in shopping for one other residential home inside specified time. In case your funding in new home is the same as or greater than such listed long run capital positive factors, all your long run capital positive factors will probably be tax free. Please observe that the funding for buying new home might be made inside a interval of three years from the date of sale of the flat. However, in case you aren’t capable of make the most of full quantity of capital positive factors earlier than the due date of submitting of your earnings tax return, it’s important to deposit the capital positive factors to the prolong not so utilized in an account beneath “Capital Gains Account Scheme” with a financial institution.

    Balwant Jain is a tax and funding knowledgeable and might be reached on jainbalwant@gmail and @jainbalwant on Twitter.com.

    Subscribe to Mint Newsletters * Enter a legitimate electronic mail * Thank you for subscribing to our e-newsletter.

    Never miss a narrative! Stay linked and knowledgeable with Mint.
    Download
    our App Now!!

  • Succession of property beneath a Will

    I’ve inherited a residential home from my paternal uncle in January 2021 by a registered will. The property comes beneath a Gram Panchayat. I’ve not acquired my title registered within the information of the Gram Panchayat for this property. Now I’m planning to promote the home and purchase one other residential home within the metropolis the place I presently reside. Is it needed for me to get the possession transferred in my title to be able to declare LTCG advantages? -D Joglekar

    There is completely different level of instances when a property passes on the loss of life of an individual relying on whether or not the deceased has made a Will or has died intestate with out leaving any Will in respect of the asset involved. In case an individual dies with out leaving a sound Will, all his belongings cross on to his authorized heirs, instantly on the date of the loss of life, as per the succession legal guidelines relevant to him. However, in case the deceased had made a sound Will, the executors are required to manage the belongings as per the Will so the belongings don’t vest with the individuals named within the Will until the executors take needed steps. This implies that the executors have to make sure that the property will get transferred within the title of the legatee as per the needs of the testator. Till the property so will get transferred, the revenue accrues to the property of the deceased and the executors need to file revenue tax return representing the property of the deceased. So for my part, it’s essential get the property transferred in your title to finish the directions contained within the Will as regards this property.

    It is advisable to switch the property in your title additionally to keep away from any litigation in future as the Will could be challenged by different authorized heirs any time in future so to be able to keep away from any problems and to make sure higher title for the customer within the type of correct chain of paperwork, please get the property transferred in your title. However, I don’t see any drawback for you in claiming the long run capital good points exemption for this transaction because the tax division shouldn’t be involved about whether or not the property was transferred in your title or not.

    Balwant Jain is a tax and funding knowledgeable. He could be reached at [email protected]

    Subscribe to Mint Newsletters * Enter a sound e mail * Thank you for subscribing to our publication.

    Never miss a narrative! Stay linked and knowledgeable with Mint.
    Download
    our App Now!!