My son has given me Rs 10 lakh which I have put in a fixed deposit. I have rental income of Rs 2 lakh a year and interest from bank of around Rs 1 lakh a year. I am 65 years old. Do I have to pay tax on this Rs 10 lakh this year?
– Vinod Kumar Dixit
As per Section 56(2)(vii) of the Income Tax Act, where an individual receives any money from any person, without consideration, exceeding Rs 50,000, then whole of such amount is taxable as income under head ‘Other Sources’. However, if such money is received from a relative, as defined in the Act, then the sum is not taxable. Since the said amount of Rs 10 lakh has been received by you from your son, who is treated as a relative under Income Tax Act, the amount of Rs 10 lakh shall not be taxable in your hands.
I want to gift a flat to my daughter after her marriage. Will she have to pay any tax on the flat?
As per Section 56(2)(vii), where any individual receives any immovable property, being land or building, the stamp duty value of which exceeds Rs 50,000, then the value of gift exceeding Rs 50,000 is taxable as income under head ‘Other Sources’. However, if such a gift is received from a relative, as defined under the Act, then the same is not be taxable. If you gift your daughter a flat, she will not be liable to pay any tax on such receipt as the gift has been received from her parent, who is treated as a relative under Income Tax Act.
Me and my wife have jointly taken a housing loan. Can she get deduction of housing loan and interest along with me and is there any limit?
There are two types of tax benefits that are available on the repayment of a housing loan.
i) Interest paid on loan is eligible for a deduction up to Rs 2 lakh per annum from the income of the individual under Section 24, where the property is self-occupied.
ii) Repayment of principal amount of loan up to Rs 1.50 lakh, is eligible for deduction under Sec 80C.
In case of a joint loan, tax benefits get divided among the co-owners. The division takes place in the same proportion in which the asset is owned by each co-owner. Each co-owner can claim a maximum tax deduction of up to Rs 1.50 lakh for principal repayment and Rs 2 lakh for interest payment.
The writer is Partner, Nangia & Co LLP. Send your queries to firstname.lastname@example.org