Will a loan under home renovation qualify for tax break under Section 80C and Section 24 under the old tax regime?
A loan taken specifically for renovation or repair of an existing house is eligible for deduction under Section 24(b). The deduction is capped to an aggregate of Rs 30,000 if the property is self-occupied. However, principal repayment of such a renovation loan does not qualify for deduction under Section 80C, since the benefit under Section 80C applies only to loans taken for purchase or construction of a residential property.
Will movable and non-movable assets received as inheritance under a Will be taxable in the hands of the recipient?
—Pradeep Kumar
Any sum of money or property received under a Will or by way of inheritance is tax exempt in the hands of the recipient. Hence, movable (e.g., jewellery, shares, etc.) and immovable assets (e.g., house property, land, etc.) received through inheritance are not taxable. However, if you later sell such inherited assets, capital gains tax will apply, and the cost of acquisition and holding period of the previous owner will be considered for computation.
My bank is reporting the quarterly interest amount on fixed deposit in my AIS. Will I get the full interest and the principal at the time of maturity. Do I have to pay tax on the full amount again?
When the fixed deposit matures, you will receive the total maturity amount (principal and cumulative interest). However, if you have already paid tax on the accrued interest each year, you do not have to pay tax on the full amount again at the time of maturity. Cross-check the interest reported in AIS with your tax return to ensure that you are not paying tax on the same interest twice. If you have not reported the accrued interest in previous years and are recognising the entire interest income at maturity, then the full amount will be taxable in the year of receipt which may lead to higher tax liability.
Apart from salary income, I also earn short and long-term capital gains from trading and investing in mutual funds. Will I be eligible to get the tax rebate of up to `12 lakh?
A tax rebate is available against income tax payable on incomes up to Rs12 lakh. However, this benefit does not extend to incomes derived from short-term capital gains (STCG) or long-term capital gains (LTCG). Therefore, if your capital gain income is less than Rs12 lakh, you will still have to pay the applicable taxes on such income. The rebate under Section 87A is available against the tax payable on your salary income.