Gifts received: Gifts received
from specified relatives are exempt from income tax, and there is no upper limit also. Similarly, gifts
of any amount and from anyone received during your marriage are totally
tax-free. Similar is the case with the gifts received under a Will or by way of
an inheritance, or from a registered charitable or education organisation or in
contemplation of death of the donor. Also, in case an individual
receives any gift from any local authority as specified under the
Act, the same would not be taxable.
However, if one gets any other cash gifts from non-relatives exceeding Rs 50,000
in a year, one is required to pay tax on the excess amount exceeding Rs 50,000.
Also, earlier, only cash gifts were taxed, but now,
with the latest amendments in the I-T laws, even non-cash
gifts will be taxed in the hands of the recipient with effect from
October 1, 2009. For instance, the scope of the taxability provisions in respect
of the gifts has been enlarged to include immovable property, including land or
building or both. Besides, certain other gifts received w.e.f. October 1, 2009,
has also been brought under the tax net. These include shares and securities,
jewellery, archeological collections, drawings, paintings and sculptures as
specified under the Act.
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Amendments to Section 56(2) with respect to Deemed Gifts and transfer of movable & immovable property
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Taxability of gift as Income from Other Sources u/s. 56 [2][vii]
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Gifts of property (gifts-in-kind) above value of rs.50,000 become taxable from 1st October 2009
Deduction in respect of
Payment off Interest on Housing
Loan
Most taxpayers generally believe that the
deduction related to interest and repayment of principal housing loan is applicable to one house only. But this
is not true. On the contrary, an individual can have
more than one housing loan.
In case the individual has two housing loans for
two separate house properties and if he resides in one of the houses, then the
other house will be considered as deemed to be let out and the deemed rental
value will be considered as taxable in the hands of the
individual.
Employee is eligible to claim a deduction under
Section 80C of the Income-Tax Act for the repayment of the principal amount.
However, this amount is limited to a total of Rs 100,000 (inclusive of the other
investments). The interest paid on housing loan will be eligible for a deduction
up to Rs 150,000 in case of a self-occupied property. However, in case a
property is let out or deemed to be let out, then there is no such limit and the
actual interest paid on the housing loan is allowed as deduction. This is
contrary to the case of a self-occupied property, wherein the maximum
interest on housing loan is restricted to Rs 150,000
p.a., subject to certain conditions.
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FAQ on Housing Loan and Income tax benefit
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Taxability of second House under the Income Tax Act,1961
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Deduction U/s. 80GG for those who paying
House rent but not receiving HRA
A tax exemption is available to a salaried
employee if he receives house rent allowance (HRA) as part of his compensation
from his employer. The exemption is calculated as per the limits prescribed
under the law. However, the maximum exemption which can be availed will be equal
to the amount of actual HRA received by the employee.
For an individual other than one receiving HRA
(whether self employed or otherwise), deduction is available under Section 80GG
of the Income Tax Act, 1961 for payment of rent on
accommodation. In this case, however, the maximum deduction that can be availed
is Rs 2,000 per month or 25 per cent of total income (whichever is less).
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House Rent Allowance (HRA) taxability and working/calculation of taxable HRA
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Get HRA rebate till you move into Your own house
Deduction in respect of Donation U/s. 80G
The belief that all donations are 100% tax-free
is not true. True, deduction is available under Section 80G of the I-T Act in
respect of donations made by an individual to certain
funds, charitable institutions and so on. There is also no restriction on the
amount of charity.
The rate of deduction, however, is either 50 or
100 per cent, depending on the choice of trust. Besides, donations must be made
to registered institutions only. Also, only donations of up to 10 per cent of
your total income qualify for such a deduction.
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Deduction under Section
80C
Under Section 80C benefits, you can get an
exemption of up to Rs 1 lakh on contributions to a wide range of investments.
These include Employee Provident
Fund (EPF), Public Provident Fund (PPF), National
Savings Certificate (NSC), 5-year bank fixed deposits, life insurance policies,
equity-linked savings schemes (ELSS), and unit linked insurance plans (Ulips),
among others.
However, you needn’t always make an investment or save money to avail tax benefits under Section 80C. You can
also claim a deduction for the school or university tuition fees you pay for
your children provided they are enrolled in a full-time course at any institute
in India. Likewise, your home loan
principal repayment also qualifies for deduction under the overall limit of
Section 80C.Also, the amount you pay as stamp duty when you buy a house and the amount you pay for the registration of the documents of the house can also be claimed as deduction under section 80C. However, this can be done only in the year of purchase of the house.
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