Hi I am summet Sood from Ludhiana. I want to ask u the following
question regarding the rebate u/s 88.
Is the additional rebate of RS.2000/- has been abolished
on investing in infrastructure bonds or not?
Is the rebate from N.S.C. in post office savings
abolished?
Reply :
Only rates of rebate have been changed. The amount on which the rate
is to be applied remains unchanged.
No. - Rebate on NSC is still admissible
Rebate u/s 88 as per Finance Bill - 2002
Section 88 of the Income-tax Act provides for a deduction from
income-tax payable by individuals or Hindu undivided families, on contribution to life
insurance premia, provident fund, etc. The deduction is equal to 20% of the aggregate
amount invested in specified instruments. In the case of an author, playwright, artist,
musician or sportsman, the deduction is equal to 25% of the amounts invested in such
instruments. For tax payers having gross salary income not exceeding rupees 1 lakh (before
allowing deduction under section16) and in whose case, gross salary income is not less
than 90% of the gross total income from all other sources, the deduction is available at
the rate of 30%. It is proposed that for persons having gross total income (before
deduction under Chapter-VIA) above Rs. 1,50,000/- but not more than Rs.5,00,000, the rate
of rebate shall be 10%. However, as an incentive for savings for the low income group, the
Bill proposes to continue with the rebate of 20% for tax payers having gross total income,
(before deduction under Chapter-VIA) not exceeding Rs.1,50,000/-. Further, keeping in
account the needs of the salaried class, the rebate shall be higher at the rate of 30% for
salaried tax payers having gross salary income not exceeding rupees 1,00,000 (before
allowing deduction under section 16) and where gross salary income is not less than 90% of
the gross total income from all other sources. The rebate shall not be available in case
of persons having gross total income (before deduction under Chapter-VIA) more than
Rs.5,00,000. It is also proposed to provide that the sums paid or deposited need not be
out of income chargeable to tax of the previous year. It is also proposed that sums may be
paid or deposited any time during the previous year, but the deduction shall be available
on so much of the aggregate of sums as do not exceed the total income chargeable to tax
during the previous year. It is also proposed to withdraw the special rate of 25% for
sports persons, artists, etc. for the sake of rationalization. It is proposed to continue
with the existing limit of qualifying investment at eighty thousand rupees. The proposed
amendment will take effect from 1st April, 2003 and will, accordingly, apply in relation
to the assessment year 2003-2004 and subsequent years.
I AM WORKING IN AN GOVERNMENT ORGANIZATION AND AVAILED HOUSING LOAN OF
3.87 LAKHS IN OCT'2001 AND REPAYING THE EMIS THEREAFTER. THE POSSESSION OF THE FLAT IS
LIKELY TO BE HANDED OVER TO ME IN NEXT FY I.E.02-03.
AT PRESENT, MY EMPLOYER IS GIVING ME THE REBATE UPTO
RS.20000/= TOWARDS REPAYMENT OF PRINCIPAL ONLY (UNDER SEC-88 OF IT) BUT NOT GIVING BENEFIT
OF REPAYMENT OF INTEREST(UNDER SEC-24 OF IT) SINCE I AM AVAILING REBATE FOR PAYMENT OF
HOUSE RENT WHICH I AM PRESENTLY OCCUPYING.
My queries are:
Whether I am eligible only one REBATE that is favourable
to me or both
repayment of interest against the housing loan availed
and
rebate on Rent payment? Can I claim the benefit of
repayment of interest in my IT RETURN for FY:01-02(AY:02-03)?
IN CASE, I DO NOT OCCUPY THE SAID FLAT IN NEXT FY
I.E.02-03 AND OCCUPY AN ACCOMMODATION BUILT BY MYSELF AFTER AVAILING A SECOND HOUSING LOAN
IN FY:02-03.
(i) Can I eligible for availing the rebate of
Rs.20,000/=(Under Sec-88 of IT) and as well rebate of Rs.1,50,000/=(Under Sec-24 of IT)
for both the loans even though I rent out the earlier flat?
(ii) Whether rental income are to be added to my annual
income?
The reply is expected to be given to me with the reference
to any benefit extended in Finance Bill-2002.
Reply :
Your question is not clear. However, since the house is not
complete, the question of deduction u/s. 24 does not arise. After completion, you can
claim rebate u/s. 88 in respect of repayment of loan as well as deduction in respect of
interest out of ALV of the property.
I have a query on 37 I abolishment
- Supposing we enter into an Agreement of Sale on 15th of March 2002 for the
purchase of an immovable property, which exceeds the prescribed limit , do we have to
now apply for 37I Clearance? The Registration of the said property will only
take place after 1st July 2002 . Please clarify ?
Reply :
Registration is not material but date of transfer is material date.
The Chapter XX-C will not apply if transfer is made on or after 1-7-2002. Transfer
includes handing over of possession, which should also be after 1-7-2002.
Although Sec.269 UC stipulates that assessees are bound to file
agreement for transfer within 15 days from the date of execution of agreement, the Supreme
Court in the case of Ansal properties has held that 15 days' limit is applicable from the
date of executing the form of 37-I. Hence in any event there is no violation of any
provision of Chapter XX C.
Does this amendment of Sec-70 is effective for Financial Year 2001-02
also (as it says providing for anomaly): “losses arising from transfer of
long-term capital assets, will be allowed to be set off only
against long-term capital gains.”
Set off of long-term capital loss
Section 70:-it is
proposed to provide in Section 70 that anomaly by amending the said section to provide
that while losses from transfer of short-term capital assets can be set off against any
capital gains, whether short term or long-term, losses arising from transfer of long-term
capital assets, will be allowed to be set off only against long-term capital gains.
It is further proposed to provide that a long-term capital
loss shall be carried forward separately for eight years to be set off only against
long-term capital gains. However, a short-term capital loss may be carried forward and set
off against any income under the head "Capital
gains", with effect from assessment year 2003-2004 and subsequent years.
Reply :
New sectio 70 is effective from 01-04-03 i.e AY 2003-04. The
amendment is proposed to rectify the anomaly since LTCG are subjected to lower incidence
of tax
Please throw light on the deduction for Dividend u/s 80L & to what
extent
Reply :
There is no amendment of sec 80 L in the proposed budget.
Therefore dividend will not get the benefit u/s 80L unless any further change takes place
before the budget is passed.
Could you please answer this question of mine. What should a
person do to avoid TDS in respect of his dividend income if his total income is well below
the taxable limit? When does it take effect since it has been stated that while TDS would
begin from 1st June 2002, taxation would be effective only from 2003-2004 assessment year
Reply :
Section 10 (33) is omitted w.e.f. 01-04-03. Dividend income
becomes taxable from AY 2003-04. Please see sec. 197A(1) of the Income tax
Act. You may sign Form No. 15G and furnish it to the payer.
The budget proposes to do away with the approval of Appropriate
Authority for sale of immovable property. Is a going to be a prospective legislation
or will it be made retrospective so that the Shylocks in the Registrar's office will no
more be able to take people to ransom!. Last budget removed the requirement of 230A
clearance, but it did not help clear any of the cases pending for registration for want of
abundant clarity. If the Finance Minister is at all conscious of clearing lacks of
pending documents all over the country, he should give some retrospective effect to these
measures.
There is a proposal to amend Agricultural Produce
Marketing Acts which is a step in the right direction. The State level APMC's have
been harassing the producers of even fruits and vegetable (by virtually chasing them like
stray dogs) and extracting funds only to be squandered in real estate activity. The so
called market areas do not directly serve even a fraction of the producers. It has
only te perpetrated the speculators and manipulators.
What is more, APMC goes on tampering with the definition
of agricultural produce and are now imposing levy even on manufactured products,
intermediaries, etc.
A person who is liable to tax does gain some extra mileage
on the tax concessions and deductibles on savings, as his actual return is more than just
the interest on investment. It is, however, cruel to punish senior citizens who
depend on the meagre returns on investments to survive themselves in the evening of their
life. A distinction on this would not only be desirable but also serve a great social
cause. Retired people having no taxable income do not have any avenue to claim rebate on
the approved savings.
Reply :
Deletion of chapter XXC is effective form 1-7-2002. The provisions of
the said chapter would not apply to sale deeds entered into after that date. Please take
note of proposed new sec 50C. wich has serious consequences
Whether sec 88 income of 1.5 and 5 lacs is gross income or net tax
payable income after deducting standard deduction and interest on housing loan, and
deduction under sec 80cc ( jeevan suraksha) pension scheme.
Reply :
If you see return of income, for example, Form No.3 SARAL Gross Total
Income includes salary after Standard Deduction and Income From House Property after
deducting interest on loan. But deductions under chapt VI-A (sec. 80CC etc) are
excluded.
Its great to hear from you. I just have a query. I have a client who is
dealing in business of transportation of Cash and valuables and charges to their client on
per trip basis. They also vault cash and valuables on their premises and charges for that
also from client
Can I know whether the same covered under service tax or
not.
Reply :
In our opinion transporting of cash and valuable is not ‘inland
cargo handling’. Providing Safe Deposit Vaults for keeping cash and valuables is
not ‘Storage and Warehousing Service’.
The activity appears to be outside the scope of service tax.
