Long-term capital gain on sale of residential house is taxed at 20%

Aug 12 2014, 02:48 IST
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SummaryI own two flats in Pune. One flat is used for residential purpose while the other has been let out.

I own two flats in Pune. One flat is used for residential purpose while the other has been let out. Is it necessary to incur some expenditure on repair and maintenance to claim 30% deduction while calculating income from house property?

— Yaresh Padgaokar

Section 24(a) of the Income-Tax Act allows a standard deduction of 30% of the net annual value. This deduction is automatic and does not depend on the quantum of actual expenditure incurred. It is allowed irrespective of the amount of expenditure incurred by the taxpayer. However, this deduction is not available for a self–occupied property as the annual value in such a case will be nil.

I have not yet filed the return of income for FY13. However, my entire tax liability was covered by the TDS. Can I file the return now? Do I need to pay any penalty?

— Amit Sood

You can file a belated return of income for FY13 at any time before the expiry of a year from the end of the relevant assessment year, i.e., up to March 31, 2015, or before the completion of assessment, whichever is earlier. If no tax is payable, you will not be liable to pay any interest for filing a belated return. However, a penalty of R5,000 may be levied under Section 271F by the tax authority if you fail to prove that there was a reasonable cause for the delay.

I am currently employed in a construction company. I have been provided a car (1200 cc) by the company. All expenditure on driver, petrol, repairs and maintenance is paid for by company. I am using the car for official as well as private purposes. What will be the value of perquisites?

— Abhay Kumar

In your case, the car is owned by the employer and all expenses are borne by him. Further, the car is partly used for official purposes and partly for private purposes. Thus, the perquisite value will be R2,700 per month (i.e., R1,800 per month for car plus R900 per month for driver/chauffeur).

My query is regarding computation of long-term capital gain on the sale of a residential house. I do not wish to claim indexation benefit and, thus, want to pay tax at 10%. Am I allowed to do so?

— Karan Gupta

The benefit of a lower rate of tax at 10% (without indexation) under the provision to Section 112 is restricted only to listed securities and doesn't

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