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What are the
tax benefits that are available if one avails of housing loan?
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Ans: |
Deduction of interest on
housing loan In the case of self-occupied property acquired or constructed
out of borrowed funds the deduction available for interest on capital
borrowed is Rs.1, 00,000/- for the assessment year 2001-2002 and for the
assessment year 2002- 2003 and subsequent years the limit has been
increased to Rs.1, 50,000/-. In case of property, which is rented, the
whole of the interest amount is allowed as deduction. The interest on
borrowed funds in pre construction period is allowed over a 5-year period.
Limit of repayment of housing loan.
The limit of repayment of housing loan qualifying for rebate is
Rs.20,000/- from the assessment year 2001-2002 and subsequent years. |
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Is there any
relief from tax arising on transfer of long-term capital assets under the
Income Tax Act, 1961? |
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Ans: |
Capital Gains on sale of
property used for residence Section 54 of the Income Tax Act provides
relief to an individual or Hindu Undivided Family from capital gains
arising from transfer of a residential house held by the assessee for a
period of 36 months. Such capital gains to the extent utilised for
purchase (within 1 year before or 2 years after the date of sale) or
construction (within 3 years of date of sale) of a residential house is
exempt u/s 54. If the amount of capital gains is proposed to be utilised,
but is not so utilised up to the due date for filing of return then, the
amount of unutilised capital gain is required to be deposited in the
"Capital Gains Account Scheme, 1988".
Capital Gains on transfer of
capital assets other than a residential house Section 54F of the Income
Tax Act exempts long term capital gains arising from transfer of any long
term capital asset other than a residential house. Such capital gains to
the extent utilised for purchase (within 1 year before or 2 years after
the date of sale) or construction (within 3 years of date of sale) of a
residential house is exempt u/s 54F. To be entitled to this exemption the
assessee should not own more than one residential house other than the
house sold as on the date of transfer.
The provisions of depositing the unutilised capital gain in the "Capital
Gains Account Scheme, 1988" as explained above is also applicable.Capital Gains not to be charged
on investment in specified assets Section 54EC of the Income Tax Act
provides relief from capital gains arising from transfer of a long term
capital asset (i.e. an asset held by the assessee for a period of 12
months in case of shares/units and 36 months in other cases).
For claiming
this exemption, the capital gains has to be invested (within 6 months of
date of transfer) in notified bonds issued by : |
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National Bank for
Agriculture and Rural Development (NABARD) |
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National Highways
Authority of India |
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Rural Electrification
Corporation Ltd |
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National Housing Bank |
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Small Industries
Development Bank of India (SIDBI) |
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