By Chirag Nangia
I’m dwelling in Japan on a long-term deputation. My spouse stays in India. Can I declare HRA profit from my firm for the hire I’m paying for my spouse’s keep in India? My firm in India is deducting hypo tax from my wage.
— Sudheer Kumar Reddy
Salaried people, who reside in rented homes, can declare the House Rent Allowance (HRA). This allowance is for bills on rented lodging. If you don’t reside in a rented place, this allowance is totally taxable. In your case, since you aren’t dwelling within the rented home in India, you aren’t eligible to say the exemption.
I’ve a query on LTCG. An individual sells a home property in September 2019. He deposits the cash in capital beneficial properties scheme in a financial institution in March 2020. He is unable to purchase a home inside two years of sale because of the pandemic. What are the choices to avoid wasting tax legally on the capital beneficial properties?
— Sumathi Sundarvasan
To avail the exemption below Section 54, capital beneficial properties on sale of property must be re-invested in new residential property inside prescribed time restrict of two or three years. However, since the timeframe is lengthy and capital beneficial properties are to be reported within the yr of sale, the Income Tax Act permits people to park the funds within the Capital Gain Account on or earlier than furnishing return of revenue for optimum two years to buy a brand new home property and declare exemption. Further, quantity you set in this may be withdrawn at any time to purchase or assemble a home.
However, quantity as soon as withdrawn must be utilised inside 60 days and can’t be re-deposited within the account instantly.
In the moment case, two years have elapsed from date of deposit in Capital Gain Account for buying a brand new home property, due to this fact exemption below part 54 can’t be availed. Consequently, legal responsibility of tax on complete capital achieve arises, which must be discharged within the yr wherein the interval of two or three years has elapsed.
The author is director, Nangia Andersen India. Send your queries to [email protected]
Source: www.financialexpress.com”