stamp duty

Query 1]

I have purchased a residential flat in Feb-2015 on agreement to sale. I had paid nearly Rs. 1,40,000/- as stamp duty & registration charges. U/s 80C, I have already saved Rs. 1,00,324/- (i.e., GPF, LIC etc.).  I want to know from the paid charges on stamp duty & registration charges, how much amount I can claim u/s 80C besides my previous tax saving investment of Rs. 1,00,324/-. I also want to know whether remaining amount can be claim in the next F.Y? Whether VAT & service tax can also be claimed under any section of Income Tax? [sunilsomkuwar@ymail.com]

Opinion:

There are certain tax breaks on home buying that can come in handy if someone has not already made enough investments u/s 80C of the Income Tax Act. Many taxpayers are not aware of the fact that stamp duty & registration charges paid for purchasing a residential house property is also eligible for deduction u/s 80C. All the more good news is that the limit of deduction u/s 80C is enhance from Rs. 1 Lacs to Rs. 1.50 Lacs for the FY 2014-15. Any individual can avail the tax breaks on stamp duty & registration charges paid while buying a house property.

As a result, in your specific case, you would be able to get deduction of Rs. 1.50 Lacs even though your eligible investment amount in the specified mode u/s 80C is Rs. 2,40,324/-. There is a maximum cap of Rs. 1.50 Lacs for deduction u/s 80C. No benefit of carry forward is available u/s 80C. Similarly, no income tax benefit is available against Service tax & VAT paid for purchasing a residential house property.

 

 

Query 2]

Please give details of IT relief under sec 89(1) towards arrears of salary in respect of Government employee:

1. Whether we have to mention gross income or taxable income in Form 10E?
2. If we consider taxable income, then the figures without arrears and with arrears don’t match to difference in PF, PT deduction (though no difference is there due to TA as it is not pay during leave). Can we simply give details without actual arrears figure matching when arrear is split in the previous with net salary & with taxable income in present year?
3. Please clarify which year ending (verify on31 March of **** ) to be mentioned in starting of form 10E (for arrear received in Dec-2014)?
   [mahesh25771@hotmail.com]

Opinion:

The arrears of salary, though it may pertain to earlier years, shall be taxable with the income of the year in which it is receive. However, to compensate the hardship cause by higher tax slab & other reasons, relief is offer through section 89(1) of the Income Tax Act-1961 read with Rule 21A(2). An adverse impact of income tax almost or significantly gets neutralized by availing the relief provided by section 89(1).

For mass benefit, I am elaborating the mode of computing relief u/s 89 in respect of Advance/ Arrears Salary. The relief can be calculate by adhering to the point-wise steps as mention below:
1. Calculate the tax payable on the total income, including the arrears of salary, of the relevant previous year in which the same is receive.
2. Calculate the tax payable on the total income, excluding the arrears of salary, of the relevant previous year in which the additional salary is receive.
3.  Find out the difference between the tax at (1) and (2).
4.  Compute the tax on the total income after including the arrears of salary in the previous year to which such salary relates.
5. Compute the tax on the total income after excluding the arrears of salary in the previous year to which such salary relates.
6. Find out the difference between tax at (4) and (5).
7. The excess of tax computed at (3) over tax computed at (6) is the amount of relief admissible under section 89. No relief is admissible if tax computed at (3) is less than tax computed at (6). If the arrears of salary relates to more than one previous year, salary would be over the previous year to which it pertain in the manner explaine above.
8. The require particular for relief u/s 89 is require to be work out in Form No. 10E.

Coming to specific point of your query, it may be note that

1. In Annexure-I to form No. 10E, you have to mention total income & not gross total income.
2. The figure of total income (in some cases like yours) of the relevant years without arrears would be require to be revise (vis a vis shown at the time of filing the return of income) on account of receipt of arrears. In short, in some cases, figure in (2) to table A of Annexure-I could be balancing figure also which could be arrive at by deducting (3) from (4).
3. For the arrears received in Dec-14, the form would contain the year ending details as “…for the year ending 31^st March 2015…..”.

stamp duty

Query 3]

Income tax notice u/s 245 mentions the demand raised u/s 143(1)(a)
(Tax demand). Is there any time limit, if any, for IT dept to send such demand and time limit for reply? Whether penalty is applicable if not replied on account of email not seen? IT return is process but due to wrong account number, refund could not be credit to bank. What one should do (online option resend refund request not working as no ref no. available) [mahesh25771@hotmail.com]

Opinion:

An intimation u/s 143(1)(a) can only be serve within a period of one year from the end of the financial year in which return is file. Taxpayers need not worry if the demand is raised on them as a result of intimation u/s 143(1) & the same is adjusted against the refund due. Instead, they should try to understand the reason for the demand. If there is any mistake apparent from the record while issuing any intimation/order passed u/s 143, it can be rectified by making an application u/s 154. Rectification application can be make within a period of 4 years from the end of the year in which order/Intimation is issue. Assessing officer is duty bond to pass an order within a period of 6 months. Receipt of application u/s 154. In case of pending refund as mentioned in the query. You can write to your assessing officer with all the relevant details.

stamp duty

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