I have recently sold a residential house and wish to invest the money for buying a new flat now. Will the registration fee and stamp duty paid for the newly-purchased flat be included in the overall investment for purchase this flat while considering long-term capital gains (LTCG) exemption under Section 54 of the Income-tax Act, 1961?
The exemption under Section 54 is available for acquiring a residential house property. Since the stamp duty and registration charges are necessary to acquire the residential property, these expenses are treated as part of cost of acquisition for the purpose of Section 54.
Therefore, they shall qualify for exemption under Section 54 of the Income-tax Act, 1961. This will also include any amount paid towards brokerage or transfer fee paid by you.
I have received a gift of Rs 75,000 in cash each from my father, mother and my father’s brother during the current year. Am I or my relatives liable to pay tax on this gift?
Since the Gift Tax Act, 1958, has been repealed, the donor is not required to pay any gift tax on the value of gifts made by him/her. So your parents and uncle are not liable to pay any tax on gifts made by them to you.
With the introduction of recipient based tax on gifts under Section 56(2) of the Income-tax Act, 1961, the recipient of a gift is liable to pay tax on such gift as the same are treated as income in case the aggregate of all the gifts received exceeds Rs 50,000 in a financial year. However, there are certain exceptions to this general rule of taxing gifts in the hands of the recipient. One such exception is in respect of gifts received from some specified relative. Parents and maternal uncles are included in the definition of specified relatives. Therefore, you are also not liable to pay any tax on such gifts.
Is there any loan which one can take from friends and in respect of which one can get tax rebate? For instance, if I borrow from some of my friends and pay them some interest. Can I claim a deduction under tax laws for the interest paid?
There is no tax benefit in respect of repayment of any principal amount of money borrowed from friends. However, if you borrow money from friends and relatives for purchase/construction or even repair/renovation of a house property, you are entitled to claim the interest on such loans under Section 24(b) of the Income-tax Act, 1961. Likewise, if you are carrying on any business or profession, you can claim such interest provided the loan has been used for business purposes.
The author is a tax and investment expert and can be reached on jainbalwant@gmail.com
(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)
