Tax deduction not available on loan used for repair of house

May 06 2014, 08:55 IST
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SummaryI acquired a plot of land for R24,000 in May 1979, which I plan to sell now. What will be the cost of acquisition?

I acquired a plot of land for R24,000 in May 1979, which I plan to sell now. What will be the cost of acquisition?

ó Pramod Sharma

As per Section 55 of the Income Tax Act, 1961, where a capital asset became the property of the assessee before April 1, 1981, the assessee has the option to take higher of fair market value of the asset as on April 1, 1981, or the actual cost of the asset as the cost of acquisition. Thus, you may take R24,000 or the fair market value of the plot as on April 1, 1981, whichever is higher as the cost of acquisition.

As per Section 55A of the Income Tax Act, where the assessing officer is of opinion that value adopted by the assessee as on April 1, 1981, is higher than the fair market value as on that date, he can make reference to the valuation officer for determining the fair market value of the property.

Last week, I had to sell my gold jewellery that I purchased in 2010. What would be the tax implication of the sale?

ó Giridhar

Capital gains arising from the sale of jewellery are subject to capital gains tax as per the provisions of Section 45 of the Income Tax Act, 1961. As you held the jewellery for more than 36 months, it is a long-term capital asset. The gains arising on the transfer of a long-term capital asset is termed as long-term capital gains and is liable to tax at 20.60%.

You would be eligible for indexation benefit. The cost inflation index for FY15 is yet to be notified (expected in June/July 2014). If your basic exemption is not exhausted by any other income, then the long-term capital gains will be reduced by the unexhausted basic exemption and only the balance amount will be taxed at 20.60%.

Further, you can avail of the benefit available under Section 54EC / 54F on reinvestment in specified assets and subject to certain conditions.

I am a salaried person working with a private sector bank in Mumbai. During FY14, I had a loss under the head, income from house property, and short-term loss on sale of shares. Is it necessary to file the return of income before the due date to carry forward such loss?

ó Manoj Shetty

As per the provisions of I-T Act, you can set off the losses from house property income against

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