CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 1 Tax Planning through Investments Exemptions available to INDIVIDUAL AND HINDU UNDIVIDED FAMILY Taxpayers.

Slides:



Advertisements
Similar presentations
MFM-MHRDM III Semester. The Annual Value of a Property consisting of buildings or lands appurtenant thereto of which the assessee is the owner is chargeable.
Advertisements

INCOME FROM HOUSE PROPERTY
CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 1 Tax Planning through Investments SECTION 54F EXEMPTION FROM CAPITAL GAIN ON TRANSFER OF CERTAIN CAPITAL ASSETS.
Deductions Basic Rule The aggregate amount of deductions under sections 80C to 80U cannot exceed the Gross Total Income.
CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 1 Tax Planning through Investments SECTION 80-IAB DEDUCTIONS IN RESPECT OF PROFITS AND GAINS BY AN UNDERTAKING.
Abdul Aziz Tayabani Advocate High Court Noorani & Company.
NON REDIDENT INDIAS - NRI. Who is Non Resident Indian under Indian Income Tax Act ? NRI means an individual, being a citizen of India or person of Indian.
Taxation Institute of Chartered Accountants Bangladesh
CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 1 Tax Planning through Investments SECTION 10B SPECIAL PROVISIONS IN RESPECT OF NEWLY ESTABLISHED HUNDRED PER CENT.
Residential Status.
IPSAS 23 REVENUE FROM NON-EXCHANGE TRANSACTIONS (TAXES AND TRANSFERS)
CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 1 Services Tax – Series 2 Changes by Finance Bill, 2011 Changes in Finance Act, 1994.
CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 1 Tax Planning through Investments SECTION 10AA SPECIAL PROVISIONS IN RESPECT OF NEWLY ESTABLISHED UNITS IN SPECIAL.
CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 1 Tax Planning through Investments SECTION 54GA EXEMPTION FROM CAPITAL GAINS EXEMPTION FROM CAPITAL GAINS ON TRANSFER.
©The McGraw-Hill Companies, Inc. 2008McGraw-Hill/Irwin Chapter 5 Itemized Deductions “A person should be taxed according to his means.” The Talmud.
Module 5 Setoff and carry forward of losses By Prof. Ashok K. Dubey.
CAPITAL GAINS. CAPITAL ASSET U/S 2(14) Property of any kind held by the assessee whether or not connected with the business or profession. and includes:
Taxation Institute of Chartered Accountants Bangladesh Md. Shakhawat Hossain Articled Student Howladar Yunus & Co.
Basic Concept/Method of Accounting. 1. Accounting concepts in Income Tax Ordinance, Accounting Concepts;
Income Tax Bar Association Karachi WORKSHOP ON INCOME TAX Hotel Sheraton, Karachi 29 – 30 August, 2005.
Chapter Objectives Be able to: n Explain the difference between capital income and business income. n Apply the general rules in determining capital gains.
INCOME FROM HOUSE PROPERTY Within the provisions of the Income Tax Act, 1961.
FIVE HEADS OF INCOME Income under head salaries.
Income from other sources. Vaibhav N Banjan. Basis of Charge- U/s 56 General Provision- Section 56 (1) Income of every kind which is not to be excluded.
FIF’s and Pensions. Investing Offshore Involves a range of complex commercial and taxation issues. Added to usual issues with investment is the need to.
CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 1 Tax Planning through Investments DEDUCTIONS AVAILABLE DEDUCTIONS AVAILABLE TO OTHERS TO OTHERS.
CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 1 Tax Planning through Investments SECTION-80U DEDUCTION IN CASE OF A PERSON WITH DISABILITY.
CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 1 Tax Planning through Investments SECTION 35AC EXPENDITURE ON ELIGIBLE PROJECTS OR SCHEMES.
Chapter 6 Income from Property 1. Inclusions Sec. 12 Interest income from savings, deposits, loans, bonds, and debentures; Dividends from shares; and.
Set off of losses Provision of section 70 to 80 of IT Act involves following three steps 1.Inter source adjustment / Intra source adjustment 2.Inter head.
Meaning CAPITAL GAINS “ Any profit or gains arising from the transfer of capital assets is taxable under the head capital gains in the previous year in.
BASIC CONCEPTS DR.N.K.GUPTA. Income – tax Act of 1961: On the basis of the recommendations made by the various committees, a new Act of Income-tax had.
Income tax DR.J.ARUL SURESH DEPARTMENT OF COMMERCE LOYOLA COLLEGE CHENNAI.
CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 1 Tax Planning through Investments SECTION 10BA SPECIAL PROVISIONS IN RESPECT OF EXPORT OF CERTAIN ARTICLES OR.
BUDGET ON DIRECT TAXES 2014 (Private & Confidential) VINOD K.MEHTA & CO. B-5 SATYAM SHOPPING CENTRE, M.G.ROAD,GHATKOPAR(E), MUMBAI TEL:
CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 1 Tax Planning through Investments SECTION 10A SPECIAL PROVISION IN RESPECT OF NEWLY ESTABLISHED UNDERTAKINGS IN.
CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 1 Tax Planning through Investments EXEMPTIONS AVAILABLETO EXEMPTIONS AVAILABLETO ALL CATEGORIES OF TAXPAYERS.
By : CA Sanjay Agarwal Mb: id: u/s 281 of Income Tax Act, 1961 Certain transfers to be void u/s 281 of Income Tax.
MMM-MIM III Semester. “The Annual Value of a Property consisting of buildings or lands appurtenant thereto of which the assessee is the owner is chargeable.
CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 1 Tax Planning through Investments SECTION 80-ID DEDUCTION IN RESPECT OF PROFITS AND GAINS FROM BUSINESS OF HOTELS.
CA. RAJAT MOHAN Goods & Services Tax BY FAR THE MOST IMPORTANT TAX REFORM IN INDIAN HISTORY - Sectoral Analysis.
INCOME TAX ACT INTRODUCTION Brought into force from Applies to the whole of India including sikkim and Jammu &Kashmir The Act has been.
INCOME COMPUTATION AND DISCLOSURE STANDARDS by CA ANKIT N. ANJARIA Rajkot Branch of WIRC of ICAI October 10, 2015.
What is a Capital Asset ? Capital Asset means property of every description. It may be ; –Movable or immovable –Tangible or intangible.
INCOME FROM HOUSE PROPERTY POINTS TO BE COVERED :  How to compute income chargeable under the head ‘Income from house Property’ generally?  Definition.
CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 1 Tax Planning through Investments SECTION 80JJA DEDUCTION IN RESPECT OF PROFITS AND GAINS FROM BUSINESS OF COLLECTING.
Chapter – 3 setoff and carry forward of losses
Residential Status and tax incidence. The following norms are necessary for deciding the residential status 1) Different taxable entities: An individual.
CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 1 Tax Planning through Investments SECTION 80-IA(6) COMPUTATION OF PROFITS OF CERTAIN ACTIVITIES FORMING INTEGRAL.
INCOME FROM HOUSE PROPERTY. INTRODUCTION This lesson deals with income, which falls under the head ‘Income from house property’. The scope of income charged.
Tax Implications CAPITAL GAINS By C.Venkata Krishna For Community: Graduates studying Income Tax.
CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 1 Tax Planning through Investments SECTION 115F Exemption from capital gain on capital gain on transfer of foreign.
mm Circular No. 17 of Income Declaration Scheme 2016
Presentation On Tax Planning Of Holding and Subsidiary Companies Prepared By:- Mitali Patel Roll No.32 Rimple Patel Roll No.36 Paresh Rathod Roll No.44.
TAX TUTORIAL PRACTICAL & TECHNICAL ASPECTS OF ASSESSMENT WORK
Impact of Budget on Individual taxpayers
Registration Process E-course on GST
Lease Accounting 22.2 LO2 Financial leases are essentially treated as debt financing Present value of lease payments must be included on the statement.
Baroda CPE Study Circle
Accounting 6160 Home Slides Howard Godfrey, Ph. D
Salary Income Significant features
INCOME FROM HOUSE PROPERTY
INCOME FROM HOUSE PROPERTY
Forming and Operating Partnerships
Presumptive Taxation & Tax Audit
Income from other sources.
Overview of Indian Tax System
CA Vijay Kr Agrawal, JAIPUR
Direct Taxation Prof. Shahid Qureshi.
Presentation transcript:

CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 1 Tax Planning through Investments Exemptions available to INDIVIDUAL AND HINDU UNDIVIDED FAMILY Taxpayers

SECTION 54 EXEMPTION FROM PROFIT ON SALE OF PROPERTY USED FOR RESIDENCE. CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 2

CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 3 (A).TAXPAYER CATEGORY-SECTION 54 This exemption is available to taxpayers, being individual or Hindu undivided family.

CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 4 (B).CONDITIONS- SECTION Nature of Capital Asset Criteria — The capital gain arises from the transfer of a long-term capital asset. 2. Original asset transferred criteria — Assets transferred being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head Income from house property.

CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 5 3. New asset acquired criteria — Assessee shall satisfy at least 1 of the following conditions : (a)Purchase a residential house either 1 year before or 2 year after the date of transfer of original residential house; (b)Construct a residential house within 3 years after the date of transfer of original residential house. (B).CONDITIONS- SECTION 54

CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 6 4. Non-transfer of new asset for 3 years Criteria — New residential house so purchased or constructed shall not be transferred within a period of 3 years from the date of its acquisition. However if this new residential house is transferred within this period then for the purpose of computing capital gains for new residential house, the cost of acquisition shall be reduced by the amount of the capital gain exempted under this section (B).CONDITIONS- SECTION 54

CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 7 5. Capital Gains Accounts Scheme — The exemption is available of the amount, which is utilized by assessee in the purchase or construction of new residential house before the date of filing return of income, and the amount, which is invested by the assessee in Capital Gains Accounts Scheme, In other words the amount which is not utilized by assessee in the purchase or construction of new residential house before the date of filing return of income, then it should be invested by the assessee in Capital Gains Accounts Scheme, 1988 latest by the date of filing return of income. The amount so invested by assessee in Capital Gains Accounts Scheme, 1988 shall be utilized towards the purchase or construction of new residential house. (B).CONDITIONS- SECTION 54

CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 8 However wherein the amount deposited in the Capital Gains Accounts Scheme, 1988 is not utilized (wholly or partly) for the purchase or construction of the new residential house within the period specified, then the amount not so utilized shall be charged as the Long Term Capital Gains of the previous year in which the period of 3 years from the date of the transfer of the original asset expires. (B).CONDITIONS- SECTION 54

CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 9 1.If the amount of the capital gain is greater than the cost of the new residential house so purchased or constructed – The cost of the new residential house so purchased or constructed shall be exempt from tax 2.If the amount of the capital gain is equal to or less than the cost of the new residential house so purchased or constructed – The entire capital gain shall be exempt. (C).AMOUNT OF EXEMPTION- SECTION 54

CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 10 SECTION 54F EXEMPTION FROM CAPITAL GAIN ON TRANSFER OF CERTAIN CAPITAL ASSETS IN CASE OF INVESTMENT INRESIDENTIAL HOUSE.

CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 11 This exemption is available to taxpayers, being individual or Hindu undivided family. (A).TAXPAYER CATEGORY - SECTION 54F

CA. Rajat Mohan B.Com(H),ACA, ACS, DISA Nature of Capital Gains on sale of original asset criteria — The capital gain arises from the transfer of any long term capital asset. 2. Original asset transferred criteria — Exemption is available for any long term capital asset not being a residential house. (B).CONDITIONS- SECTION 54F

CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 13 (B).CONDITIONS- SECTION 54F 3. New asset acquired criteria — The assessee has, within a period of 1 year before or 2 years after the date on which the transfer took place purchased, or has within a period of 3 years after that date constructed, a new residential house. 4. The assessee does not own more than 1 residential house, (other than the new residential house) on the date of transfer of the original asset.

CA. Rajat Mohan B.Com(H),ACA, ACS, DISA The assessee, shall not purchase any residential house, (other than the new residential house), within a period of 2 year after the date of transfer of the original asset. However wherein the assessee defaults, the amount of capital gain exempted under this section shall be deemed to be long-term capital gains of the previous year in which such residential house is purchased. 6. The assessee, does not construct any residential house, (other than the new residential house), within a period of 3 years after the date of transfer of the original asset. However wherein the assessee defaults, the amount of capital gain exempted under this section shall be deemed to be long-term capital gains of the previous year in which such residential house is constructed. (B).CONDITIONS- SECTION 54F

CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 15 (B).CONDITIONS- SECTION 54F 7. Non-transfer of new asset for 3 years criteria — New residential house so purchased or constructed shall not be transferred within a period of 3 years from the date of its purchase or construction. However if this new residential house is transferred within this period then the amount of capital gains exempted under this section shall be treated as long-term capital gains of the previous year in which such new residential house is transferred.

CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 16 (B).CONDITIONS- SECTION 54F 8. Capital Gains Accounts Scheme — The exemption is available of the amount (prorate basis as per formula given above) which is utilized by assessee in the purchase or construction of new residential house before the date of filing return of income and the amount (prorate basis as per formula given above) which is invested by the assessee in capital Gains Accounts Scheme, In other words the amount which is not utilized by assessee in the purchase or construction of new residential house before the date of filing return of income, then it should be invested by the assessee in Capital Gains Accounts Scheme, 1988 latest by the date of filing return of income. The amount so invested by assessee in Capital Gains Accounts Scheme, 1988 shall be utilized towards the purchase or construction of new residential house.

CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 17 (B).CONDITIONS- SECTION 54F However wherein the amount deposited in the Capital Gains Accounts Scheme, 1988 is not utilized (wholly or partly) for the purchase or construction of the new residential house within the period specified, then the following amount shall be treated as Long Term Capital Gains in the previous year in which the period of 3 years from the date of the transfer of the original asset expires.

CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 18 (a)If the cost of the new asset is not less than the net consideration in respect of the original asset - The whole of such capital gain shall be exempt. (b)If the cost of the new asset is less than the net consideration in respect of the original asset - So much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall be exempt. (C).AMOUNT OF EXEMPTION-SECTION 54F

CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 19 LTCG = Capital Gains on sale of original Capital Asset x Amount unutilized Net Consideration (D).FORMULA FOR CALCULATING EXEMPTION - SECTION 54F

CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 20 (E).FORMULA FOR WITHDRAWAL OF EXEMPTION – SECTION 54F LTCG = Capital Gains on sale of original Capital Asset x Amount unutilized Net Consideration

CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 21 There is no stipulation in act, rules, notification or circular that new asset so purchased cannot be mortgaged. In other words, loan can be taken on the security of such new asset. There is no stipulation in act, rules any notification or circular that new asset so purchased cannot be leased. In other words new asset so purchased can be leased. However this step might require due planning and structuring of the deal in the light of separate provisions in financial lease and operating lease. This may involve litigation also. (F).STRUCTURING TAX- SECTION 54F

CA. Rajat Mohan B.Com(H),ACA, ACS, DISA 22 New asset so purchased cannot be transferred for a period of 3 years. However we can use section 47 and actually transfer the new asset without there being any capital gains. There is no stipulation in act, rules, notification or circular that new asset is to be purchased from own funds of assessee or from the sale proceeds of original asset. Even if an assessee borrows required funds and satisfies other conditions relating to investment in specified assets, he is entitled to exemption. (F).STRUCTURING TAX - SECTION 54F

23 THANK YOU Your comments and suggestions are of utmost importance and are always welcomed. CA. Rajat Mohan B.Com(H), ACA, ACS, DISA MOHAN AGGARWAL & ASSOCIATES Chartered Accountants Head Office F-31 D.B. Gupta Market, Karol Bagh, New Delhi Office Phone: / Branch Office 18A, IInd Floor, North Avenue Road, West Punjabi Bagh, New Delhi office Phone: /97 Website: