R90 lakh. I bought the house in 2006. Kindly suggest some tax-saving avenues.
— Deepak Ahuja
As you purchased the house more than three years ago, the gain on its transfer will be treated as long-term capital gain. In respect of long-term capital gain, reinvestment benefits under Section 54 of the Income-Tax Act, 1961, for investment of capital gains in new residential house is available. Another option, to claim exemption under Section 54EC, is by reinvesting the capital gain in eligible NHAI/REC bonds within six months of the date of transfer. The maximum amount that can be invested in such bonds is R50 lakh per financial year. If you are able to invest in two different financial years falling within a six-month period, you can even claim exemption up to R90 lakh.
I made an FD of R1 lakh in the name of my minor daughter from a gift received from her mother. The FD earns R8,500 a year as interest. Will this income will be clubbed in my or my wife’s income?
— Ashok Chandrasekhar
As per Section 64(1A) of the I-T Act, an income accruing to a minor child will be clubbed in the income of the parent having greater income (excluding the income to be clubbed). As such, the income of R8,500 will get clubbed in either your or your wife’s income, depending on who earns more. An Exemption of up to R1,500 under Section 10(32) will be available.
The writer is founder of RSM Astute Consulting Group
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