I sold my house for Rs 80 lakh. Can I put the entire amount in tax-free bonds and is there any tax after maturity of the bonds? —Sachin Sharma
As per Section 54EC, you can invest your proceeds from sale of house up Rs 50 lakh in tax saving bonds (capital bonds) issued by NHAI, REC, etc., within six months from the date of sale. Hence, exemption for capital gain can be claimed up to Rs 50 lakh under this provision. Further, such bonds shall not be converted into money before five years from the date of its acquisition, otherwise the gains exempted earlier get taxable in the year in which such conversion is made. There is no tax on maturity but interest earned on these bonds shall be taxed.
I am a senior citizen. This is the second year of filing ITR for me. I have the following income for FY2017-18: Rental income, interest income, long-term capital gains, short-term capital gains. Which ITR should I file? —A Govindarajulu
Since you have rental income, interest income under the head ‘Income from other sources’ and ‘Income under the head capital gains’, you will be required to file ITR-2 to report all these incomes.
If I buy a house Rs 70 lakh, will I have to deduct 1% TDS and issue a certificate to the seller? —Puran Chand
Yes, you need to deduct TDS @ 1% on the full amount paid to the seller. As per Income-Tax Act ,1961, when a person purchases any property where consideration exceeds Rs 50 lakh per seller, then the buyer shall deduct TDS at 1% of the amount being paid to the seller. You will need to make the payment by filing Form 26QB online through the Income Tax department website and within 15 days of such payment you will need to furnish the seller a certificate in Form 16B as an acknowledgement for deduction of TDS.
I and my wife have a joint home loan and I claim the tax benefit for both interest and principal repayment. If we take another joint home loan can my wife take benefits for it? —Pallav Kumar
The conditions for claiming benefit is that the person must be the owner of the house. If your wife too intends to claim the benefit of repayment of interest and principal for home loan, it is advisable that she is also be the co-borrower and should actually be repaying it.
The writer is partner, Ashok Maheshwary & Associates LLP. Send your queries to email@example.com