I own a plot in a joint name with my wife (housewife with no income). Now I am planning to sell it off. My queries are:
• From the sales proceeds, can I buy two separate flats in two different cities without attracting long-term capital gain tax?
• Instead of buying a new property, we want to keep the amount in bank/bonds to be used in the future. How do we go about this and for how long should we avoid long-term capital gain tax?
Selling a plot would mean tax liability in respect of long-term Capital Gains. Assuming that the plot has been held by you for quite a long time either sell the plot, pay Capital Gains tax and keep the money invested in a bank fixed deposit for old age or in the alternative you and your wife, as you are co-owners, can buy two separate flats in two separate cities and avoid payment of long-term Capital Gains. The final answer will depend upon your age, your current income and your obligations with regard to buying a property in your name. Please screen all these points and only then take a decision to buy or not to buy.
As an individual if I buy a commercial property (office space), will the rental income from it be treated as income from house property or from business and profession? What are the applicable taxes and deductions from such income? Do any of the banks provide loan to an NRI who wishes to buy commercial property?
In respect of letting out commercial property, the rental income will be treated as income from house property. You will get deduction in respect of payment of house tax and also a 30 percent standard deduction will be available to you. If any loan has been taken on this property, the interest on the commercial property loan will also be allowed to be deducted in full without any upper limit. Regarding whether the bank is giving loan to the NRI or not, please get in touch with the relevant bank.
I am planning to buy a 2BHK flat for my son. The price is Rs 90 lakh. My son has just completed one year in service and is not eligible for a housing loan for more than Rs 15 lakh. I am willing to give him Rs 45 lakh from my side. I am a retired man. If I arrange to pay the full amount now and register the flat in my name, can he take a loan after five or six years and pay me Rs 45 lakh back? How does he go about the loan at that time or can I register the flat now in my and my son's name jointly? If so can he still get a housing loan after 5 or 6 years and pay me back his share? Please advise.
Under the Income-tax Law there is no problem if you give the loan to your son. If you like, you may give loan or you may make a gift. However, from the tax planning point of view it is better to give a loan to your son and later he may even like to buy this flat from you. However, please discuss the matter with your son in detail and only then take a decision.
Shall Tax Deducted at Source (TDS) be deducted in case of an NRI selling his/ her property to Indian resident? Is it the buyer's liability? Please advise on the following:
• How can a buyer deposit TDS on behalf of seller without TIN?
• What if the seller has already invested capital gains in India elsewhere before (1 year) transaction/ transfers his property?
• What shall be ideally done to ensure a smooth deal?
• What are the sections to be referred?
Yes, it is the duty of the buyer to deduct the tax at source. Under the new provision no TIN Number is required for this purpose. Even if Capital Gains have been invested, still tax will have to be deducted at source. It is expected very shortly new rules in this respect will be issued by the Government.
• From the sales proceeds, can I buy two separate flats in two different cities without attracting long-term capital gain tax?
• Instead of buying a new property, we want to keep the amount in bank/bonds to be used in the future. How do we go about this and for how long should we avoid long-term capital gain tax?
Selling a plot would mean tax liability in respect of long-term Capital Gains. Assuming that the plot has been held by you for quite a long time either sell the plot, pay Capital Gains tax and keep the money invested in a bank fixed deposit for old age or in the alternative you and your wife, as you are co-owners, can buy two separate flats in two separate cities and avoid payment of long-term Capital Gains. The final answer will depend upon your age, your current income and your obligations with regard to buying a property in your name. Please screen all these points and only then take a decision to buy or not to buy.
As an individual if I buy a commercial property (office space), will the rental income from it be treated as income from house property or from business and profession? What are the applicable taxes and deductions from such income? Do any of the banks provide loan to an NRI who wishes to buy commercial property?
In respect of letting out commercial property, the rental income will be treated as income from house property. You will get deduction in respect of payment of house tax and also a 30 percent standard deduction will be available to you. If any loan has been taken on this property, the interest on the commercial property loan will also be allowed to be deducted in full without any upper limit. Regarding whether the bank is giving loan to the NRI or not, please get in touch with the relevant bank.
I am planning to buy a 2BHK flat for my son. The price is Rs 90 lakh. My son has just completed one year in service and is not eligible for a housing loan for more than Rs 15 lakh. I am willing to give him Rs 45 lakh from my side. I am a retired man. If I arrange to pay the full amount now and register the flat in my name, can he take a loan after five or six years and pay me Rs 45 lakh back? How does he go about the loan at that time or can I register the flat now in my and my son's name jointly? If so can he still get a housing loan after 5 or 6 years and pay me back his share? Please advise.
Under the Income-tax Law there is no problem if you give the loan to your son. If you like, you may give loan or you may make a gift. However, from the tax planning point of view it is better to give a loan to your son and later he may even like to buy this flat from you. However, please discuss the matter with your son in detail and only then take a decision.
Shall Tax Deducted at Source (TDS) be deducted in case of an NRI selling his/ her property to Indian resident? Is it the buyer's liability? Please advise on the following:
• How can a buyer deposit TDS on behalf of seller without TIN?
• What if the seller has already invested capital gains in India elsewhere before (1 year) transaction/ transfers his property?
• What shall be ideally done to ensure a smooth deal?
• What are the sections to be referred?
Yes, it is the duty of the buyer to deduct the tax at source. Under the new provision no TIN Number is required for this purpose. Even if Capital Gains have been invested, still tax will have to be deducted at source. It is expected very shortly new rules in this respect will be issued by the Government.
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