Tuesday, October 26, 2010

CAPITAL GAINS AND TAX ON SALE OF HOUSE

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CAPITAL GAINS AND TAX ON SALE OF HOUSE

Oct 26, 2010 7:56:36 PM

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Do you do any banking on your smartphone? If yes, what do you do? If not, what's holding you back? CAPITAL GAINS AND TAX ON SALE OF HOUSE<br/> The Income Tax Act contains specific provisions on tax of capital gains arising out of transfer of a house. Capital gain tax is leviable on sale or transfer of a house. What constitutes a sale and transfer has been specified under the Income Tax Act. The capital gains tax is computed on the indexed cost of the house sold, which is deducted from the amount received by the assessee. The indexed cost is computed according to the indexation rates notified by the Income Tax Department for each year.<br/> A seller of property can reduce the capital gains tax by complying with the provisions specified under the Act. The benefit is available only to individuals and to a Hindu Undivided Family. No other category of assesses are eligible for the concessions.<br/> The asset transferred should be a residential building including land attached to it. Further, any income from the house should be chargeable to tax under the head &#39;Income from House Property&#39;. Other types of properties are not eligible for this exemption. The capital gains should arise from the transfer of a long-term capital asset. The house must be held for a period of more than 36 months before the date of sale or transfer. It may be selfoccupied or rented out.<br/> In order to avoid being liable to pay capital gains tax, an assessee should have either purchased a house within one year of the sale or should do so within two years after the date on which the transfer took place, or construct a house within a period of three years after the date of transfer. In these cases, instead of the capital gains being charged to income tax as income of the previous year in which the transfer took place, it will be dealt with in accordance with the specified provisions.<br/> More gains than cost of new house<br/> In case the amount of capital gains is greater than the cost of the new house purchased or constructed, the difference between the capital gains and the cost of the new house is charged as income of the previous year. In case the new house is sold within a period of three years of its purchase or construction, for the purpose of computing capital gains in respect of the new house, the cost will be nil.<br/> Gains less than cost of new house<br/> In case the amount of capital gains is equal to or less than the cost of the new house, it will not be charged to tax at all. In case the new house is sold within a period of three years of its purchase or construction, for the purpose of computing capital gains in respect of the new house, the cost will be reduced by the amount of the capital gains.<br/> Any amount of the capital gains which was not appropriated by an assessee towards the purchase of a new house within one year before the date of transfer of the original house, or which is not used by him for the purchase or construction of a new house before the date of furnishing his returns of income, should be deposited in specified bank accounts. The amount should be deposited before the due date of filing income tax returns.<br/> The amount can be used in accordance with any scheme the central government may frame. The proof of such deposit should be attached with the income tax returns. The amount already used by an assessee for the purpose of purchase or construction of a new house together with the amount deposited will be deemed to be the cost of the new house.<br/> In case the amount deposited is not used fully or partly for the purchase or construction of a new house within the period specified, the unused amount will be charged as income of the previous year in which the period of three years from the date of transfer of the house expires.<br/> An assessee will be entitled to withdraw the amount in accordance with the provisions of the scheme.<br/> Courtesy Times Property dtd:-23/10/2010<br/> For more information about real estate, property, residential property, realty firm, commercial property, commercial real estate, real estate developers log on to <a href="http://www.zameen-zaidad.com">http://www.zameen-zaidad.com</a><br/> <br/>
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When you experience something great or amazing, who's the first person you want to share it with? MANAGING INTEREST RATE HIKE<br/> Over the past few weeks, many banks have increased their benchmark prime lending rates (PLRs). The PLR is a reference or benchmark interest rate used by banks for lending. The central bank&#39;s recent decision to increase the key rates had many banks feel the pinch of increased cost of funds. To maintain profitability, the lenders passed on this burden to home loan borrowers.<br/> Take for instance the case of Rahul, who had borrowed Rs 25 lakhs at 13% floating rate of interest. His EMI due was around Rs 37,000 computed for a tenure of 10 years. The lender increased his rate of interest to 15%. What would be his EMI outflow after the increase? It comes to around Rs 40,000.<br/> For borrowers on a tight budget, such an increase in rate could be worrying. Instead of panicking, the borrower must learn to manage his finances and debts more efficiently.<br/> Here are a few tips:<br/> Be prepared<br/> Borrowers who have taken a floating rate of interest must anticipate fluctuations in interest rate. Some lenders do not even send a formal communication on rate increase to their borrowers. Nor do they warn their customers of any impending rate increase.<br/> Set aside a small amount every month that you could use in case the bank suddenly decides to increase your EMIs. Buy early<br/> Buying early ensures you become debtfree very soon. Also, repaying your home loan earlier in life enables you to augment other investments sooner.<br/> Borrow as much as needed<br/> Heavy debts take a longer time to clear and could be more challenging. Borrowers who are unable to repay might default and lose their dream home.<br/> Avoid more debts<br/> If you are unable to make home loan repayments, explore a suitable repayment option with the lender. Indulging in more personal loans and credit card purchases could make the situation worse to handle. Desist from wasteful expenditure.<br/> Explore alternate sources<br/> A gold loan, loan against security or borrowing against any property could help you raise the much-needed funds. Do not stop contributing to your emergency or contingency fund. Explore if you have other assets that you could sell and prepay your home loan as much as possible.<br/> Increase tenure<br/> So, if Rahul increases his loan tenure to 18 years from the original 10 years, his EMI due drops to Rs 33,500.<br/> Courtesy Times Property dtd:-23/10/2010<br/> For more information house for sale, homes for sale, houses on rent, rental house, rented property, apartment for sale, property on sale, flats in delhi, flats in Gurgaon, rental flats on sale log on to <a href="http://www.zameen-zaidad.com">http://www.zameen-zaidad.com</a> and <a href="http://www.propertycafeteria.com">http://www.propertycafeteria.com</a><br/> <br/>

RAVI CHAUHAN

Hi I am Ravi Chauhan I am working in (Bhardwaj Buildtech Pvt Ltd) Company in Delh To Visit for more information http://www.zameen-zaidad.com & http://www.propertycafeteria.com/main.aspx

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