India Income Tax Made Simple

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Excerpt: No , said the Kerala High Court in Meera Jacob vs ITO [ dt of order 9/06/2008 ] 313 ITR 411 . The small order of Hon,ble High Court is as under :   The question involved is whether the assessee, in the computation of long term capital gains, is entitled to deduction under Section 54F of the Income tax Act in respect of investment in modification/expansion of an existing residential house. The Tribunal took the stand that exemption is available only when the investment is in the construction of a…

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Excerpt: Income Tax Act has a provision u/s 14A which states, in simple terms , that any expense incurred by a taxpayer on earning of income which is exempt from tax is not allowable as deduction. There was however , no method of computation provided and thus considerable litigation ensued between Income Tax Department and the tax payers related to computation of expense used for earning income exempt from taxation. For example ,a tax payer who received huge amount of dividend. Dividend is exempt from tax. In his P & L accounts, although he debits many expense like-interest,other indirect cost…

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Excerpt: I have sold a residential house in April’ 09 on which the long term capital gain is working out to be Rs.20 lacs.Also, I purchased a residential house in March’09 (I do not have any other residential property of any kind) for Rs.12Lacs.Can I invest Rs.8 Lacs in NHAI Capital gain bonds (under sec54ec) to get exemption of tax payment to full extent.The query can be summarised as follows: Can I take advantage of both CAPITAL GAIN BONDS and RESIDENTIAL HOUSE in minimizing my long term capital gain liability or is any one of the above options that I need to…

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Excerpt: I sold a piece of land in April 2004 with LTCG of Rs 1600000/. At the cost of 1800000/ got the right of purchased OF FLAT endorsed in my favour by the person who originally booked the flat with builder in APR05 .Original allottee has paid to the builder rs 1500000/ as 90% of the cost which was automatically adjusted against the cost of flat to me by the builder.The flat was jointly purchased with my wife the entire sum was paid by me to original purchaser rs 1800000/in April 2005.The last instalment of Rs 82000/ was paid to the…