My employer and I contribute the same amount towards the National Pension System (NPS), for which I claim tax deduction under section 80C. But from this year, since additional Rs 50,000 is allowed for NPS, can I claim under that head as well, if I invest the additional amount?
Yes. According to the Finance Act, 2015, an additional deduction of Rs 50,000 is allowed to the employee for an additional contribution made towards NPS. This is irrespective of the deduction allowed/claimed under section 80C. Therefore, you are eligible to claim an additional deduction of Rs 50,000 under section 80CCD in case you consider contributing to NPS.
As of April 1, 2014, I owned two houses. One is in Mumbai and self-occupied, and the other one is in Indore, which was let out. In November 2014, I bought one more flat in Indore, also let out. In July 2015, I sold my earlier flat in Indore. Kindly let me know whether long-term capital has arisen or the same is exempt.
Kuldip Kumar,
executive director - tax & regulatory practice, PwC, answers your questions
The views expressed are expert's own. Send your queries to yourmoney@bsmail.in
Yes. According to the Finance Act, 2015, an additional deduction of Rs 50,000 is allowed to the employee for an additional contribution made towards NPS. This is irrespective of the deduction allowed/claimed under section 80C. Therefore, you are eligible to claim an additional deduction of Rs 50,000 under section 80CCD in case you consider contributing to NPS.
As of April 1, 2014, I owned two houses. One is in Mumbai and self-occupied, and the other one is in Indore, which was let out. In November 2014, I bought one more flat in Indore, also let out. In July 2015, I sold my earlier flat in Indore. Kindly let me know whether long-term capital has arisen or the same is exempt.
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Under the Income Tax Act, 1961, any gain arising on the sale of property is subject to tax. The tax rate will depend on whether the gain is short or long-term. You have not mentioned the month you purchased the Indore house but from your question, it appears you held it for more than 36 months. In that case, you can explore availing the long-term exemption under Section 54, where you re-invest the gain in another residential property. Section 54 provides that such residential house needs to be purchased within a period of one year before the transfer or within two years after the date of transfer. In your case, you sold the Indore house (I) in July 2015 and had purchased another house in Indore (II) in November 2014. Therefore, you can use the purchase of Indore house ( II), to avail exemption from capital gain tax.
Kuldip Kumar,
executive director - tax & regulatory practice, PwC, answers your questions
The views expressed are expert's own. Send your queries to yourmoney@bsmail.in