I am an employee working in the private sector. I also own a house (loan from a bank) in the same city of my employment which has been given on rent as I am staying with my parents. My employer is not allowing me the set off of the loss of house property from my salary.
?Jaspal Singh
Where the house property is rented out, the entire amount of interest payable is deductible i.e. the ceiling of Rs. 1,50,000 does not apply. In such cases, where the interest deduction is higher, some employers have the practice of not allowing the deduction through salary payroll. That being said, the rules dealing with TDS on salary do not expressly disallow the higher deduction.
It is not clear from your query whether your employer is not permitting the deduction on account of the above mentioned reason or because you are staying in rented property in the same city that you own a house. Note that here too, there is no restriction on you ? you can stay in a rented property in spite of the fact that you own a house in the same city that you work in. In other words, you would be eligible for HRA deduction as well as the interest deduction.
You have two courses of actions?Claim the deduction through filing your returns. You will get a refund from the Department.
Make a complaint to the Department against your employer.
I have booked an under-construction property in June 2009 for a cost of about Rs 55 lakh (including stamp duty etc.). The construction is expected to be completed in June 2010. I have taken a loan of Rs 50 lakh and the total loan disbursement till now is Rs 45 lakh. Besides the loan amount paid to the builder till now, I have also already paid my contribution of Rs 5 lakh. (Total payment to builder till date is Rs 50 lakh).
I already have a house and I plan to sell it in the next 1-2 months. I am getting around Rs 40 lakh for this property. This property was purchased for Rs 10 lakh (including stamp duty, regn, CIDCO transfer, society NOC) about 8 years back. My doubt is this:
What is the amount of exemption on long term capital gains I can claim (after indexation, etc.) considering the fact that I have already paid about Rs 45 lakh through housing loan and also another Rs 5 lakh as my own contribution?
In other words, will I be eligible for exemption of long term capital gains in the present case even though I am not ‘actually’ using the money from the sale of first house for the purchase of the second house? Do I need to invest this money in the capital gains account of PSU banks, etc. or I can simply invest it anywhere as I want (e.g. in shares, mutual funds or buying a car.).
?Sunil
In your case, you would be taking shelter under Sec. 54 of the ITA for the capital gains tax exemption. Under this section, the construction of the new property should be completed within three years of the sale of the original property. From the data provided, you would be selling the original property by November/ December 2009 while the construction of the new property would be completed by June 2010. So you are well within the prescribed time limit.
Also there is no requirement of a live link between the sale proceeds of the original property and the purchase of the new one. So even if you are acquiring the new property with a loan / own contribution combination, as long as the cost of the new property is equal to the capital gain, full exemption may be claimed. Again in your case, the cost of the new property is more than the anticipated amount of capital gain.
Therefore, to conclude, the full amount of capital gain will be exempted.
How many times can we continue the PPF account after completion of 15 years. Bankers said that you can continue only once for five years, Please suggest if any government reference is available.
?Rajendra Vyas
The note under Rule (9-3B) states, ? A subscriber may at his option (to be exercised before the expiry of the first year of every extended block period) avail of this facility for a further block of five years on expiry of 20 years or on expiry of 25 years and so on, from the end of the year in which the initial subscription was made.? The continuation can be with or without contribution. Once an account is continued without contributions for more than a year, the subscriber cannot opt to change over to continue the account with contributions. [Notification F.3(6)-PD/86 dt 20.8.86]. This facility of post-maturity continuation is not available to NRIs.
It is unfortunate but true that the officers at the account offices do not have a clear cut knowledge of the PPF Rules. This causes a lot of harassment to the account holders who are forced to make several trips to the office. Ultimately the problem gets solved but a lot of valuable time of the officers, leave alone the time of the account holders, is wasted.
The authors may be contacted at wonderlandconsultants@yahoo.com