Home > Money > Question
Need Expert Advice?Our Gurus Can Help
Mihir

Mihir Tanna  |801 Answers  |Ask -

Tax Expert - Answered on Mar 01, 2023

Mihir Tanna has more than 10 years of experience in direct taxation, including filing income tax returns.
He regularly represents clients before the income tax authorities including the commissioner of income tax (appeal).... more
Sumit Question by Sumit on Feb 24, 2023Hindi
Listen
Money

Dear Sir, My mother is a tenant under the old "Pagdi" system of one building which is no longer standing . Now if and when this building gets redeveloped , my mother plans to sell her Tenancy rights to the Developer at the then prevailing rates instead of a apartment in the new building. My question is : in that case the amount she receives from the Developer will get taxed as Capital Gains or the normal Income tax slab rates? Thanks in advance, sir. Sumit Ganguly

Ans: Tenancy right is a capital asset and gain earned on transfer of capital asset is usually chargeable under head Income from capital gain.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
Money

You may like to see similar questions and answers below

Sanjeev

Sanjeev Govila  |458 Answers  |Ask -

Financial Planner - Answered on Jul 28, 2023

Listen
Money
I have some queries regarding tax on sale of my property which I need to show in my Income Tax return in FY-2023-24. I had purchased a flat in Kolkata at a total cost of 8.50 lacs [including registration cost] and registration was done in April, 2004. I had sold the said flat in May,2023 at Rs.31 lacs. My queries are :- 1. Do I need to pay Capital Gain tax on the sale of this flat ? 2. How much tax do I need to pay ? 3. How to show this capital gain income and tax in my Income Tax retirn next year ? Please advise. Regards, Ratan K. Saha
Ans: You need to understand the following things about taxation of your flat:-
1. You have earned a profit (called capital gains in this context) on the sale of your house. So tax is due.
2. However, tax will not simply be 31L – 8.5L. The Govt gives you an advantage of inflation over the years which increases your purchase cost through a process called ‘Indexation’, thus decreasing your tax. Please google and read up on it, or contact a good CA or a financial advisor.
3. You also get credit for registration and stamp duty charges, brokerages paid as also any improvements done in the house of a permanent nature.
4. Please read up on Income Tax Section 54 which also gives out how you can save tax on your final capital gains arrived at.
5. The entire calculations and sale/purchase details have to be shown in the ITR. Most probably you will be filling ITR-2 for this next year but please ascertain the same when you are about to file the tax since rules keep changing.
(more)
Tejas

Tejas Chokshi  |126 Answers  |Ask -

Tax Expert - Answered on Aug 07, 2023

Listen
Money
Sir, during this month (August2023) I sold my flat which was purchased by me in 2010. The total sale consideration as per govt guidelines was Rs 5973000/ and was registered at that amount, accordingly TDS at 1% on it was deducted at Rs 59730 and was credited to the govt account. My query is , TDS on sale of property at 1% is applicable in case the amount of sale exceeds Rs 50.00 lakhs . Whether the TDS is applicable on full sale consideration or on the difference amount ie, (5973000-500000)Rs 973000. 2. I had purchased the flat in April 2010 and the purchase price was Rs 3150000/ including Stamp duty, Registration charges and small amount towards interior work. I request you to advise me the applicability of Capital Gain Tax on it. Now I do not want to invest in any new property or in Capital gain bonds, I want to pay the applicable tax and close the transaction. Please advise me about the applicable Tax and close the formalities applicable in this regard. Siddramappa Kudarimoti.
Ans: The TDS (Tax Deducted at Source) of 1% on the sale of property exceeding Rs 50 lakhs is applicable on the full sale consideration. In your case, since the total sale consideration was Rs 5,973,000, the TDS of Rs 59,730 was deducted as per the guidelines. Based on the information you've provided, you might be liable for Capital Gains Tax. Capital Gains Tax is calculated based on the difference between the selling price and the indexed purchase price. The indexed purchase price adjusts the original purchase price for inflation over the holding period.
The tax on long-term capital gains is usually 20% (plus applicable surcharge and cess) after considering any exemptions or deductions available under Section 54 or Section 54F if you are not investing in another property or capital gains bonds.

To close the transaction and fulfill your tax obligations, you should consider the following steps:

a. Calculate Capital Gains: As explained above, calculate the capital gains based on the indexed purchase price and selling price.

b. Pay Capital Gains Tax: If you decide not to invest in another property or capital gains bonds, you will need to pay the applicable capital gains tax. You can do this by filling out the appropriate sections in your income tax return and paying the tax amount.

c. File Income Tax Return: Ensure that you accurately report the capital gains in your income tax return for the assessment year.

d. Keep Documentation: Maintain all relevant documents related to the property sale, purchase, and tax calculations for future reference
(more)
Latest Questions
Shekhar

Shekhar Kumar  |47 Answers  |Ask -

Leadership, HR Expert - Answered on Apr 19, 2024

Asked by Anonymous - Apr 18, 2024Hindi
Listen
Career
Sir I am a 22 years old graduate with a degree in polymer technology from Tamilnadu. I am considering change my career from process engineer to maintenance and service engineer so please guide me on that field is good to join and kick start my career in this arena
Ans: Thank you for getting in touch with me on Rediff Gurus. Transitioning from a process engineer to a maintenance and service engineer can be an exciting career change, offering new challenges and opportunities for growth. But before making the switch, familiarize yourself with the responsibilities and duties of a maintenance and service engineer. This role typically involves ensuring the smooth operation of machinery and equipment, conducting routine maintenance tasks, diagnosing and troubleshooting issues, and performing repairs as needed. With the rise of Industry 4.0, there's a growing demand for engineers skilled in advanced manufacturing technologies such as additive manufacturing (3D printing), robotics, automation, and digital twin technology. Consider gaining expertise in these areas to stay at the forefront of technological advancements in predictive analytics, machine learning, and IoT (Internet of Things) sensors, which are in high demand. Gain knowledge of renewable energy technologies such as solar, wind, and hydroelectric power and explore opportunities in roles related to smart infrastructure, intelligent transportation systems, and smart city initiatives to help build resilient and efficient urban environments. These options align with your background in polymer technology and offer exciting opportunities to contribute to technological advancements and sustainability initiatives in the future. Kindly consider these areas further to identify career paths that align with your interests, skills, and aspirations.
(more)
Anu

Anu Krishna  |802 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Apr 19, 2024

Asked by Anonymous - Apr 19, 2024Hindi
Listen
Relationship
Hi ma'am, something happened between me and my boyfriend as usual fights. His parents misunderstood him and me as well that I've gotten sick due to our fights and that he left me halfway through my house, which he didn't. And due a lot more misunderstandings he's parents have developed bit of a rage against me and they are blackmailing him to not try to Contact or call me or else they'd end their lives and he is scared cause he is an only child. Even if he wishes and tries to reach me he cannot because of his parents. What can be done in this situation. Now i don't understand shall i wait for him to come back or just move on. Since we haven't met or spoken for the last time. I haven't heard anything from him and his parents are saying he doesn't want to talk to anyone.
Ans: Dear Anonymous,
Do not waste your time...his parents and then him; you will constantly be in a stressful spot convincing either one of them that you are the person. If your boyfriend also feels the same as you about the relationship, then he will do something to support you.
If he doesn't and all that is becoming your job, then seriously do not waste any more time on this. And if he really wanted, he would have found a way of reaching out to you.
The very fact that you haven't heard much from him is a huge red flag. Focus on yourself and better people who respect you and your love will come along...
(My suggestions are only under the assumption that you and your boyfriend are above the age of 18 and 21 respectively).

All the best!
(more)
Anu

Anu Krishna  |802 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Apr 19, 2024

Asked by Anonymous - Apr 19, 2024Hindi
Listen
Relationship
Hi Anu, I am 47 year old. I have 2 kids one is in adolescent in age and other is 8 y.o. I and my wife are very much comfort and enjoy sex life since inception of our marriage. But, from last 7 years, i am in relation with a beautiful girl, whom i met as a sex worker, when she was 24. Her only source of income is her work (i.e., sex work). She is astonishingly beautiful. I went mad after since the day i met her. thought i could not do sex at first time, i did it in the next time and till now we mated just 7 times. She is epilepsy patient and she is very serious about her family. She has to look after her mother, a younger sister who is studying Law and two of her sister's kids ( her sister died ). She asks me for help whenever she falls short of money. She went to dubai in 2018, and continued her work there. I asked her to leave her job and assured a good income source and a respectful life. She hesitated to concur on my plan. The whole issue is known to my wife. She married an Indian residing in Dubai recently but for her bad luck, he is untraceable from 2 monhts in a war proned country. Now, she asked my help again after 8 months. we both were not in touch in these days. I lent her my helping hand again and expressed if she would have married me, i would have kept her happy. She loves me a lot, but since i am a married man, she does not want to create problem in my married life. I can convince my wife about her, but she (girlfriend) is not ready for it for the fear of my wife. I just can't imagine my life without her. that much i love her. I don't wish to destroy her married life either. If she gets her husband back, i will be happy, but i will be living in her memory forever, as i just cannot expect my life without her. I need your suggestion. whether to come out of her relation or continue if her hubby misses forever.
Ans: Dear Anonymous,
You do realize the mess that you are creating for yourself, your wife and this lady?
Do you really think it is possible to live in harmony with all these complications and then there's an absconding husband at the other end?
Be sane about the whole thing and focus on what's important to you...Your children need a stable family environment and you do not need to be told how crucial this is for them given their age...And just because your wife isn't complaining that does not mean, you just overlook what all this must be doing to her. Put your life back together and leave some things alone to sort themselves out...

All the best!
(more)
Anu

Anu Krishna  |802 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Apr 19, 2024

Asked by Anonymous - Apr 18, 2024Hindi
Listen
Relationship
Hi Anu I am a 36 year old IT pro with a beautiful family (wife and 2 kids) 1 year back, i had a coworker (shes married but widowed with 1 kid) with whom i had to work on a project..we shared a good friendship and unfortunately on one occasion, under the influence of alcohol, i went overboard and had a deep sexual chat with her..it was mutual and the next day i really felt bad and apologized to her.she also said it was ok.. After that i avoided her but she kept on giving singals to continue the relationship, i sternly avoided her and pleaded with her in message and call to leave me..during the time of sexual chat, i never knew she was a widow else i wud not have done that..shes now harassing me and stalking me on social media..i really feel bad for what i did to her and am over ridden with guilt..she says lets be friends as she has no one to turn on to.. but i pretend to be as she still has that chat messages and if she raises an ombuds i will be out of the job..but worse of all, i do not want this to destroy my family life. I love my wife and kids and she wont take this easily if i disclose this to her .pls suggest a way out of this..i am really desperate..it was jus a chat and i am a train wreck now..
Ans: Dear Anonymous,
This is a bit messy...It could land you into a lot of trouble and obviously you didn't know that when you were chatting with her, right?
Avoiding her hasn't worked and the best thing possibly now would be to just be polite yet firm where she feels that she is not being snubbed. Also consider taking your wife into confidence as this will eliminate the chance of ruining your peace at home. Come clean and confess to your wife and request her to support you; of course she might give you a earful, listen to all of it.
You have a price to pay for the fun that you had that one time; so take it in your stride and tread carefully...be kind to the woman and be honest with your wife. You can only pray that this can keep you out of trouble.
And the next time you drink, kindly keep your phone away...

All the best!
(more)
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x