BASIC EXEMPTION LIMIT FOR THE F.Y. 2010-11

BASIC EXEMPTION LIMIT FOR THE F.Y. 2010-11

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BASIC EXEMPTION LIMIT

Query 1]

I am a senior citizen. Please let me know the personal income tax limits for the financial year 2010-2011 (Assessment year: 2011-2012). [n_premkumar@hotmail.com]

Opinion:

The basic exemption limit and tax slab/rate for the F.Y. 2010-11 (Assessment Year 2011-12) is as under:
A) For Resident Senior citizen (65 years or more)
i) Up to Rs 2,40,000/-                                  :           Nil
ii) Rs. 2,40,001/- to Rs 5,00,000/-             :           10%
iii) Rs. 5,00,001/- to Rs. 8,00,000/-           :           20%
Income above Rs. 8,00,000/-                      :           30%
B) For Resident Male assesseess other than senior citizen
i) Up to Rs. 1,60,000/-                                 :           Nil
ii) Rs. 1,60,001/- to Rs 5,00,000/-             :           10%
iii) Rs.5,00,001/- to Rs. 8,00,000/-                        :           20%
Income above Rs 8,00,000/-                       :           30%
C) For Resident Female assesseess other than senior citizen
i) Up to Rs. 1,90,000/-                                 :           Nil
ii) Rs. 1,90,001/- to Rs 5,00,000/-             :           10%
iii) Rs.5,00,001/- to Rs. 8,00,000/-                        :           20%
Income above Rs 8,00,000/-                       :           30%.
Query 2]

I have a query on sale of Agricultural Land. Recently my father has sold an Agricultural land (Urban) which was purchased by him in the year 1981. Subsequently he purchased another Agricultural land (Rural) with the amount received from sale of Urban Agricultural Land with an assumption that agricultural land can be purchased with the amount received from sale of earlier agricultural land.  After purchasing the new land, we came to know that sale of the agricultural land situated within 8 Km from the Municipal Corporation limit would attract LTCG. We also heard that purchase of new agricultural land can be shown under section 54D to get exempted from tax. Is it right to use Sec. 54D for tax exemption? Kindly advise us. [cst_wcl@rediffmail.com]
Opinion:

  1. Exemption u/s 54D is available on investment of capital gain arising out of compulsory acquisition of land & building forming from of the Industrial Undertaking.
  2. Capital gain arising on transfer of Urban Agricultural Land can be saved by claming an exemption u/s 54B (& not u/s 54D).
  3. Exemption u/s 54B:
    The main stipulations incorporated in section 54B are as under: –
    a) Exemption is available to an Individual Only. [Exemption is not available to HUF or any other category of Assessee]
    b) Capital gain arises on transfer of Agricultural Land. The Agricultural land may be a long term capital assets or may be even a short term capital assets.
    c) The Agricultural Land is used by the tax payer or his parents for agricultural purpose for a period of two years immediately preceding the date of transfer.
    d) The taxpayers has purchased another land for agricultural purposes within a period of two years from the date of transfer.
    If all the above conditions are satisfied, Lower of the following shall be allowed as exemption u/s 54B:
    i) The amount of capital gain generated on transfer of agricultural land or
    ii) The amount invested for purchase of new Agricultural Land.

 

Query 3]

Home loan was sanctioned to me for purchase flat on 31st March 2010 by SBI. From April 2010, I have been paying Rs. 11,214/- as pre-EMI regularly as construction of flat was in progress. Sale Deed of flat was done in December 2010 and now I will Pay EMI of Rs. 12,214/- from January 2011. My question is how much tax benefit will I get as I have paid certain amount of interest which is pertaining to a period before I have taken the possession i.e., pre-construction period? [sandip_omitsoft@yahoo.com]

Opinion:

Deduction towards interest on Housing Loan is available u/s 24(b) of the Income Tax Act-1961. For the purpose of section24(b), pre-construction period means the period commencing from the date of borrowing and ending on March 31 immediately prior to the date of possession. In your case, pre-construction period would mean the period from the date of loan to 31.03.2010. The period from 01.04.2010 to December-2010 would not be considered as pre-construction period. Effectively, entire interest paid during the F.Y. 2010-11 would be eligible for deduction u/s 24(b). Similarly, entire principal portion of loan repaid during the F.Y. 2010-11 would be eligible for deduction u/s 80C.

BASIC EXEMPTION LIMIT


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