In case of untimely switch of flats previous to receipt of CC, the taxable occasion happens on the time of switch of such flat.
Q. I went into joint improvement with a builder in Chennai the place the land belonged to me and the builder obtained a pre-agreed variety of flats in lieu of endeavor the development. I wish to promote considered one of my flats as quickly as it’s handed over, so I wish to know if it can appeal to capital beneficial properties, particularly as a result of the present guideline worth is identical as once I entered the joint settlement.
A. Joint Development Agreements (JDA) are taxed within the following method:
At the time of handover of flats from the developer, Capital Gains shall be charged as earnings within the earlier yr wherein a reliable authority points a Completion Certificate (CC) offered the JDA is registered. Full Value Consideration shall embody guideline worth as on CC date for the world surrendered and any financial consideration obtained by you. However, in case of untimely switch of flats previous to receipt of CC, the taxable occasion happens on the time of switch of such flat.
At the time of sale of flats obtained by land proprietor from the developer to a 3rd celebration, Capital Gains shall be charged on the time of switch of flat obtained by the owner from the developer to a 3rd celebration. Full Value Consideration would be the financial consideration obtained from the third celebration learn with part 50C whereas the price of acquisition for constructed portion of flat would be the proportionate guideline worth on the time of receipt of CC calculated within the ratio – (constructed space offered divided by complete constructed space obtained) multiplied by the rule worth of the world surrendered on the time of CC) and price of UDS transferred shall be the proportionate buy value of the land space retained multiplied by UDS transferred to the possible purchaser divided by complete space retained within the JDU. Kindly contemplate different facets equivalent to direct prices concerned in switch of property and likewise long run and brief time period based mostly on the interval of holding.
Q. My partner and I collectively personal a home. The EMI of the home mortgage is fully paid my me. My spouse is employed however her earnings is beneath the taxable restrict. Can I declare the tax exemption for all the quantity of home mortgage curiosity or ought to I restrict it to 50% as the home is collectively owned?
A. If each husband and spouse are co-borrowers to the housing mortgage and solely you’re servicing all the compensation obligation, you’re eligible to assert deduction for the principal and the curiosity parts beneath Sections 80C and 24 respectively for all the quantity borne by you. You might declare the identical so long as your co-borrower will not be doing so. Be certain to request out of your lender a Certificate of Interest with a purpose to declare the advantages.
Q. I retired from authorities service in April 2017 from an Autonomous Council of Ministry of Environment, Forest & Climate Change, Govt. of India. Leave encashment quantity was paid to me after TDS on quantity exceeding ₹three lakh. The quantity has been added to my earnings and I paid the Income Tax on quantity exceeding ₹three lakh and filed the return for Assessment Year 2018-2019. But now a few of my colleagues have claimed and obtained the refund of tax on the entire quantity of depart encashment paid to them. I wish to know whether or not I can declare the tax refund for the depart encashment quantity added to my earnings in extra of ₹three lakh for the Assessment Year 2018-2019?
A. Leave encashment obtained by a Central/State authorities worker on the time of retirement is absolutely exempt. The window to revise your ITR is now closed and there’s no risk of rectifying the ITR as rectification of ITR doesn’t permit the sort of a rectification. You can’t declare any refund of the tax paid on account of the quantity obtained in direction of depart encashment now.
(The author is a accomplice, GSS Associates, Chartered Accountants, Chennai)