You may have to produce copy of receipt of stamp duty payment, registration charges and house purchase papers in case of scrutiny. If you are a non-resident, you cannot set off exemption against capital gains in respect of listed shares. A senior citizen can claim up to Rs. 50,000 as deduction for health premium under Section 80D
I have recently purchased an old flat jointly with my wife for which both of us have contributed equally towards the cost. We have paid stamp duty and registration of Rs 5 lakh on it. Can we claim stamp duty and registration fee for tax deduction? What are the documents we will need for the same?
Answer: Under Section 80C of Income-tax Act, 1961, an individual and a Hindu Undivided Family (HUF) are allowed to claim deduction up to Rs. 1.5 lakh in respect of stamp duty and registration charges paid during the year in respect of a residential house property.
This deduction is available along with other eligible items like life insurance premium, Provident Fund contribution, investments in equity-linked savings schemes (ELSS), tuition fees for two children, and principal repayment of home loan etc.
Both of you can claim deduction for stamp duty and registration charges only up to Rs. 1.5 lakh each even though share of each one of you in the stamp duty and registration charges comes to around Rs. 2.50 lakh.
Since you are not allowed to submit any documents while submitting the income tax return (ITR), you may have to produce the copy of receipt for payment of stamp duty and registration charges along with agreement in respect of purchase of the property in case your case gets selected for detailed scrutiny.
How will tax be calculated if I have only short- and long-term capital gains (LTCG) on listed shares in India in the previous year? Will I get any rebate like salaried individuals who have tax exempted income of up to Rs 2.5 lakh?
Answer: The short term capital gains (STCG) in respect of listed shares are taxed at a flat rate of 15 per cent, whereas LTCG are taxed at a flat rate of 10 per cent after the initial Rs. 1 lakh on which tax is charged at nil rate, thus making the initial Rs. 1 lakh of LTCG on listed shares tax-free in your hand. No indexation benefit is available in respect of LTCG on listed shares.
You can claim rebate under Section 87A of the Income-tax Act, 1961 up to Rs. 12,500 for your tax liability in respect of such STCG. Do note that the rebate under Section 87A is not available against your tax liability arising due to LTCG on listed shares.
Since you do not have any other income, you will have to pay tax on such gains after reducing the amount of basic exemption of Rs. 2.50 lakh. If you are a non-resident for tax purposes, you are not allowed to set off the amount of basic exemption against capital gains in respect of listed shares.
We are a senior citizen couple. We have taken a health insurance policy for which we pay an insurance premium of Rs. 38,000 per year. How much deduction will we get for the health insurance premium paid?
Answer: A senior citizen can claim up to Rs. 50,000 as deduction for health premium paid for the family under Section 80D of the Income-tax Act, 1961. Within this overall limit of Rs. 50,000, you can also claim up to Rs. 5,000 paid for preventive health check-up during the year. Since your premium amount does not exceed the threshold limit, you will be able to claim deduction for the full amount of premium of Rs. 38,000 paid by you, and up to Rs. 5,000 in case you have paid for any preventive health check-up for yourself or your spouse.
Balwant Jain is a tax and investment expert
(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)