Do you have income tax-related queries?
Please ask your questions HERE and rediffGURU Mihir Tanna, associate director, S K Patodia and Associates, will answer you.
Anonymous: Sir I have kept a plot for sale and to buy a house. But I have already 2 houses gifted from my mother and father to me and I want to gift to my 2 sons one who is 18 and other is 20 years old. Can I escape from capital gain tax if I sell the plot and buy the house?
As on the date of sale of plot, if you own only 1 property you are eligible for exemption u/s 54F. Thus, if you gift houses to your children before sale of plot, you will be eligible for tax exemption.
Anonymous: Hi Sir, I am planning to invest in US equities through Icici direct. What are the tax and other implications I should be aware of during a) holding of such equities and b) redemption/sell-off of such equities?
Indian residents investing in foreign shares and earning capital gains taxed based on holding periods. If it is hold for 24 months (it will be considered as long-term) and taxable at 12.5%. Dividends are taxed at applicable slab rates and foreign tax credits may apply subject to fulfillment of certain conditions.
Anonymous: Hello sir, the commercial property (purchased in 2003 for 6.5 lakhs) that I have sold is registered on two names. The first name is mine and the second name is of my husband. My husband can't take tax benefit as he has already two properties on his name. I have already invested 63 lakhs in under-construction residential flat in nov 24.
This property is already registered and it's possession is expected in June 2027 and I have sold my commercial property in June 25. I have taken the cheque of 1.1 cr on my name and five lacs on my husband's name. So now how it can be calculated to save maximum tax on capital gain? Please guide.
For income tax purpose, person who contribute in acquisition of property is usually considered owner for tax purpose. Thus, if both of you contributed while acquiring commercial property, both will be liable to pay tax in the proportion of amount contributed.
Further, if you transfer commercial property and acquire new residential property, you are eligible for claiming exemption in Sec 54F subject to certain conditions like on the date of sale of commercial property, you should not have more than one house property.
You have to invest entire sale consideration of commercial property in construction of residential house property within 3 years of transfer of commercial property. Balance amount cannot be invested in construction before due date of filing ITR, is required to be invested in capital gain scheme account with specified bank.
As you have started construction before transferring commercial property, claiming 54F can be subject to litigation.
Anonymous: My daughter works in UK. I would like to send 10 lakh to her from India for her future use or investment purpose. Would she have to pay any tax? Would I have to pay tax? If she leaves UK in near future, would there be any implication to take out the money from UK?
From Indian Income Tax Act point of view, there will not be any tax implication on gift given to daughter. For UK tax laws, please consult with local consultant. However, it is advisable to execute gift deed.
Suryakumar: My father aged 79 years is selling off his pagdi flat in Mumbai (transfer of tenancy rights) and this will attract long term capital gains. My question is - will any TDS be deducted by buyer on the sale? Sale consideration is 60 lakhs. Also will the cost of acquisition be Nil as we don't have any clear records of what was paid initially for the pagdi?
Tenant is not the owner of property. Consideration is received for transfer of rights in property. In the Pagdi system, property rights are transferred through a tripartite agreement between the landlord, outgoing tenant, and incoming tenant/owner. Accordingly, it is advisable to deduct TDS on gross consideration.
- You can ask rediffGURU Mihir Tanna your questions HERE
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