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Ankit
Beginner
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  1. CA Sanjiv Kumar Enlightened Chartered Accountant

    Hi Ankit, Buying a property from an NRI will require deducting TDS at 12.5% on the sale price under Section 195, assuming it is a long-term capital gain and the transfer took place on or after July 23, 2024. If it was before this date, then the rate will be 20% on the sale price. Surcharges will beRead more

    Hi Ankit,

    Buying a property from an NRI will require deducting TDS at 12.5% on the sale price under Section 195, assuming it is a long-term capital gain and the transfer took place on or after July 23, 2024. If it was before this date, then the rate will be 20% on the sale price.

    Surcharges will be applicable at 10% if the sale consideration is between 50 lakhs to 1 Cr and 15% if more than 1 Cr.

    Health and Education cess @ 4% applicable on the tax additionally.

    Please read my previous answer for the details on the process of deduction.

     

     

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Ankit
Beginner
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  1. CA Manish Kumar Gupta Enlightened

    Hi, The purpose of section 44Ad is to give relief to small assessee from compliance of maintaining books of accounts and annual Audit. This section is not related to the filing of ITR. It just gives a method of calculation of the taxable income of a business. So in this case, if the taxable income oRead more

    Hi,

    The purpose of section 44Ad is to give relief to small assessee from compliance of maintaining books of accounts and annual Audit.

    This section is not related to the filing of ITR. It just gives a method of calculation of the taxable income of a business.

    So in this case, if the taxable income of a business is less than the maximum amount which is not chargeable to tax then filing of return is not mandatory.

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Ankit
Beginner
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  1. Best Answer
    CA Manish Kumar Gupta Enlightened
    This answer was edited.
    Is interest paid on home loan included in the cost of housing property while computing capital gains tax on its sale?

    Hi, In short "Yes" Real Estate is on the boom and involved huge costs. Attractive marketing schemes make it more lucrative.  Generally, People buy a house with the help of a bank loan and pays interest on that home loan. Repayment of Principal is allowed as deduction under section 80C and Portion ofRead more

    Hi,

    In short “Yes”

    Real Estate is on the boom and involved huge costs. Attractive marketing schemes make it more lucrative.  Generally, People buy a house with the help of a bank loan and pays interest on that home loan.

    Repayment of Principal is allowed as deduction under section 80C and Portion of such Interest can be claimed as deduction under section 24(b) while calculating Income from the house property.

    Now see the twist:

    Interest paid on a housing loan can be considered in the acquisition cost of a house while calculating capital gain under section 48.

    Section 48 of Income Tax says that

    The income chargeable under the head “Capital gains” shall be computed, by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset the following amounts, namely:—

    (i) expenditure incurred wholly and exclusively in connection with such transfer;

    (ii) the cost of acquisition of the asset and the cost of any improvement thereto:

    The case of CIT vs. C. Ramabrahmam (2013) also supports this claim.

    So, Interest paid on a house loan can be claimed at both the income head, House Property, and Capital Gain.

     

     

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