Can I claim refund of excess TDS paid?
S. C. Vasudeva
Q. I had deducted the TDS @ 1.03 per cent on each installment of payment released to the developer as against the total cost of the flat booked by me since June, 2013. The cost of the said flat is Rs 72 lakh approximately. The amount of tax has also been remitted to the Income Tax office on time. Likewise, TDS amount as against the installment for the period April, 2016 onwards was also recovered at the same rate i.e. 1.03 per cent and remitted to the Income Tax office. On receipt of Form 16 (B) pertaining to these months (April,2016 onwards), received from the Income Tax office, it was noticed that the deductions of TDS had been depicted/credited, @ one per cent as against the recovery of one and a half per cent (in Forms 16 B). On an enquiry from the Income Tax office I was informed that the TDS amount had been recovered on the higher side and the refund of excess amount of TDS could therefore, be claimed by filing of the ITR for the relevant year.
Kindly advise as to whether or not the refund for the excess amount can be claimed. If so who could seek refund — the buyer and or the seller?
Kindly also confirm as to whether recovery of TDS for the Financial Year 2016-2017 is required to be made @ 1 per cent and or 1.03 per cent. In fact, the TDS rate as applicable for the financial year prior to 2016-2017 was 1.03 per cent only. — vishnu pathak
A. Your queries are replied hereunder:
n According to the provisions of Section 194-1A of the Income Tax Act 1961 (The Act), no tax is required to be deducted by the buyer from the consideration for transfer of an immoveable property, in case such consideration is less than Rs 50 lakh. The tax is to be deducted @ 1 per cent only for the financial year 2016-17 and not @ 1.03 per cent.
n In respect of excess amount of tax deposited by you, a refund can be claimed by the seller/developer of the property on the basis of the challan-cum-certificate to be given to the seller.
How can I save LTCG tax?
Q. I had purchased a flat in 2011 and sold the same in 2016 earning Rs 28 lakh. The deal has not been completed as yet and I hope to get the payment by November, 2016. Kindly let me know how I can save capital gain tax.— kamal kant bhardwaj
A. You can save the amount of tax payable on the amount of capital gain, if any of the following two options for purchase or construction of one residential house in India is exercised.
- The amount of capital gain is utilised for the purchase of a residential house within one year before or two years after the sale of the flat; or
- The amount of capital gain is utilised for construction of a residential house within three years after the date of the sale of the flat.
The amount of capital gain which remains unutilised before the due date of filing of the tax return for the assessment year in which the capital gain arose, is required to be deposited with a bank under capital gain scheme account. The amount so deposited can be utilised for the purchase or construction of a residential house.
You also have an option to utilise the amount of capital gain towards the purchase of tax-saving bonds within six months of the date of sale of a flat. These bonds can be purchased for a sum not exceeding Rs 50 lakh. The investment so made would also enable you to claim exemption from the leviability of tax on the amount of capital gain arising on the sale of the flat.
How much capital gain tax should I pay?
Q.I had purchased a builder floor in Delhi on October 14, 2006, details of the payment made by me are given below:
Cost of stamp paper 0.40 lakh
Registration amount 5.00 lakh
Cost of renovation 3.01 lakh
Total cost 8.41 lakh
Bank loan raised 6.07 lakh
Self contribution 2.34 lakh
For renovation I had raised a loan from a bank but I have not procured any bill/receipt. Now I have sold this property for Rs 15 lakh. I already have two residential houses in my name. What will be the capital gain tax that I will have to pay? Now I am investing these proceeds in a commercial property.
— krishna kumar tarun
A. The reply to your query is based on the assumption that the entire cost of the builder’s flat as well as renovation expenditure was incurred in the financial year 2006-07. The amount of capital gain has, therefore, been computed on the said basis. The indexed cost of the builder’s flat on the said basis works out at Rs 18,22,977. There would, thus, be a long-term capital loss of Rs 3,22,977. The said loss can be carried forward for a period of eight assessment years which can be adjusted against long- term capital gain within the said eight assessment years.
The indexed cost as computed includes amount incurred for renovation. You should obtain an approved valuer’s certificate for such expenditure which can be submitted in support thereof in case the assessment comes up for scrutiny. This certificate from the approved valuer would be essential to prove the amount incurred for renovation as you do not have any supporting evidence in respect of such expenditure having been incurred. I hope you have the necessary withdrawals from your bank account to the extent of amount incurred.
Can I file a revised IT return now?
Q. I sold my old house at Mohali for Rs 40 lakh in July 2015 and after a month purchased a new flat for Rs 42 lakh from a private builder at Sunny Enclave on Mohali Kharar Road. Both the transactions of sale and purchase were done through RTGS and crossed cheques. Like every year I submitted ITR-1 in July 2016 and AY 2016-17, but someone advised me that I also need to file ITR-2 showing the above transactions of sale and purchase of properties.
My queries are:
n In case filing of ITR-2, is compulsory for me, then can I do it now and submit revised return ITR-2 latest by 31.3.2017?
n Secondly, the registry of the flat is not yet done and I have possession letter only. As I am growing old, I intend to gift the flat to my son and daughter-in-law and get the gift deed registered in their names.
Please advise me about the procedure for gifting the flat and whether any fee/gift tax etc. has to be paid to get the gift deed registered in their names.— s.s. bali
A. Your queries are replied hereunder:
- ITR-2 is applicable to an individual or Hindu Undivided Family (HUF), if such individual or HUF has income from business or profession. Therefore, in case you are not carrying on business or profession, income-tax return filed by you in ITR-1 is in order.
- It would be advisable to get the transfer of the flat in the records of the builder by paying certain amount as transfer charges and get the registration of the flat directly done in favour of your son and daughter-in-law. This would avoid the execution of a gift deed and enable you to save payment of stamp duty for the registration of such gift deed.
- The letter filed with the builder should indicate that you are gifting the flat to your son and daughter-in-law and therefore, the same should be transferred in their names. This letter should be sufficient for the purposes of making a gift to your son and daughter-in-law who will in any case be required to accept such a gift.
Is tax rebate allowed on interest on home loan?
Q. My son had raised a house loan from a nationalised bank for the construction of a new house about five years back. The interest is accrued thereon on monthly basis. This loan is being repaid in monthly instalments as fixed by the bank. But the bank gives certificate of the amount of actual repayment of loan and not for the actual amount of interest accrued thereon in a financial year. The bank takes the plea that the amount of interest has not actually been repaid to the extent it is accrued. My contention is that the bank should give separate certificates i.e. one for the actual amount of interest accrued and the other for the actual amount of loan repaid during a financial year. Kindly clarify whether the bank is right in its plea as stated above. Kindly also let me know whether income tax rebate is available on interest accrued or only on the amount of loan actually repaid by way of installments fixed by the bank. — s.k.singla
A. Your queries are replied hereunder:
- The bank is supposed to give a certificate with regard to interest accrued on the loan which has been borrowed by your son, even if the amount of interest is not included in the installments being paid. A certificate with regard to the accrued interest should be given by the bank.
- Deduction under Section 24 of the Act against income from house property is allowable in respect of the interest paid/payable. A deduction cannot be disallowed on the plea that the amount of interest has not been paid. Section 24 of the Act provides for deduction even if the interest has not been paid but is payable.
