By Amit Maheshwari
l My father wants to gift a property to my son who is 21 years old. Does he have to pay any tax on the gift? Will it reflect on his AIS?—Brijesh Pant
Gifts between lineal ascendants and descendants are fully exempt from tax. Your father can gift the property to your son without attracting any income tax implications. Gifts of property should be recorded through a registered gift deed and hence such high-value transactions may be reflected in the recipient’s Annual Information Statement (AIS).
l I have got the possession of my flat after eight years. I have not been able to claim tax benefits on the loan. Can I claim the entire benefit now and for how many years?—Anand Sharma
Under Section 24(b) of the Act, you can claim deduction for the interest paid on your home loan from the year of possession onwards. The pre-construction interest can also be claimed, but it must be spread equally over five years beginning from the year in which possession is obtained. However, since you got possession after more than five years since the loan was taken, the maximum deduction for interest on a self-occupied property will be Rs 30,000 per annum instead of Rs 2,00,000. These deductions are available only under the old tax regime; if you have opted for the new tax regime under Section 115BAC, you will not be eligible to claim these benefits.
l I will retire from a private sector company after 30 years of service. I will get gratuity from the company and employees’ provident fund. Do I have to pay tax from the money received from these two?—Mohit Singh
When you retire from a private firm after 30 years of service, the tax treatment of retirement benefits is governed by Section 10 of the Act. If the gratuity received is covered under the Payment of Gratuity Act, 1972, the exempt amount will be the lower of the actual gratuity received, Rs 20 lakh, or 15/26 of the last drawn salary (basic plus dearness allowance, if forming part of wages) for each completed year of service, with service beyond six months counted as a full year.
However, if it is not covered under the Gratuity Act, the exemption is the lower of the actual gratuity received, or Rs 20 lakh, or half a month’s average salary of the last 10 months (including basic, dearness allowance in terms, and any fixed-percentage commission)for each completed year of service. The accumulated balance received from a recognised provident fund on retirement is fully exempt from tax, if you have completed at least five years of continuous service. Both amounts must be reported in the ITR, with exempted portions claimed in Schedule EI.
The writer is tax partner, AKM Global, a tax and consulting firm. Send your queries to fepersonalfinance@expressindia.com
