Search Results For: exemption


QUERY: Please explain the procedure for e-filing of return of a deceased’s estate till final distribution of assets i.e. maturity of Section 54EC Bonds, Tax Saving FDR., P.O. deposits etc., [section 168 (1)(a)]. Whether he will have to apply for separate PAN or PAN of deceased will serve the purpose. The basic exemption will also be available for Rs. 2,00,000/- or not applicable to deceased?
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Section 168 of the Act applies to executors as well as to administrators or other person administrating the estate of a deceased person.

Sections 159 and 168 of the Act deal with assessments on legal representatives. Section 159 of the Act is meant to enable the revenue to make an assessment on legal representation in respect of the income which accrued to or was received by the deceased,

QUERY: Mr. X has purchased single premium money back plan of LIC; called New Bima Bachat Policy. Sum assured is Rs. 7,00,000/-. He has paid a single premium of Rs. 5,59,843/-. He will be getting Rs. 1,05,000/- as survival bonus after every three years from LIC during the span of 15 years and there after the sum assured with Bonus on maturity.

The survival bonus and sum assured with bonus, receivable during the life time of Mr. X, is taxable in his hands as there is no exemption available as per the provisions of section 10 (10D) of the Income tax Act. There will be TDS also on this amount. Mr. X has not claimed deduction under section 80C on this premium paid, which in any case would have been Rs. 70,000/- only.

In this connection, the following questions arise:

1. Is there any specific provision under the Income tax Act by which this amount is taxed under the head “Income from other sources”?

2. Is it possible to show the income under head Capital Gain?

3. Is there any provision to claim the investment made in the policy as cost against the survival benefits?

4. If yes then how the same is to be claimed i.e. can one claim the cost by dividing it against the survival benefit receivable after every three years and then pay tax on entire amount received on maturity.


5. If the investment made is not allowed to be deducted from the survival amount receivable, will it not be unconstitutional as this will amount to taxing gross receipt and not income.
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From the facts, it is clear that Mr. X has taken money back insurance policy called as New Bima Bachat Policy. As per the terms of the said policy, it is a single premium payment policy, where sum assured will be paid back to the policy holder in the form of survival benefit periodically.

QUERY: A HUF was having a house property which was let out and rent was charged under the head ‘Income from House Property’ on which tax was paid. The said property was sold for Rs. 30/- lakhs which the HUF wants to invest in the name of coparcener (daughter). Whether HUF is entitled to get benefit under section 54F of the Income-tax Act, 1961 as coparcener is a part of the HUF?
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According to me no benefit would be available to the HUF if it invests in the name of coparcener. Under section 2 (31) read with section 4 the HUF as well as coparcener are separate assessable entities. This view is supported by the decision of Income Tax Appellate Tribunal, Nagpur Bench in ITO vs. Prakash Timaji Dhangode [258 ITR (AT) 114], where the Tribunal has held as under:

QUERY: In the joint development agreement, when land owner is entitled to 5 flats in a building to be constructed by the developer on land belonging to the assessee landlord, is exemption u/s. 54F available to the assessee land lord?
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From the fact it is clear that land owner would retain the land and developer would allot five flats as consideration for transfer of development right to developer.

As per DCIT v. G. Raghuram [46 ITR 136 (Hyd.)], the cost

QUERY: An assessee received residential house property under will during financial year 2000-01. The previous owner of property had purchased the property in the year 1975. The said property has been dismantled by the assessee and same is sold under the construction stage during the financial year 2009-10. Can assessee get exemption u/s. 54 or not. If not, can the assessee get the exemption u/s. 54F due to property is under construction ( i.e., said property is not residential property at the time of sales).
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As I understand from the query, that the assessee has received a residential house property under will during the financial year 2000-01, which was purchased by the previous owner in 1975. Now dismantling the said property, the assessee has sold the said property in the financial year 2009-10. I presume that the previous owner was

QUERY: As per sections 54/54F of the Act capital gain arising from sale of a residential house is exempt if the amount of capital gain is invested in purchase or construction of another residential house by the assessee. Whether the exemption is available if the new house is purchased by the assessee jointly in the name of wife?
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In CIT v. Ravinder Kumar Arora [342 ITR 38 (Del.)], the facts were, the assessee claimed exemption of capital gain to the extent of Rs. 3,18,59,276/- under section 54F of the Act on account of purchase of a new house property, out of the total gain arising from sale of land. The AO rejected the claim because the house had been purchased in the joint names of

QUERY: X is the owner of a flat, and he is also a co-owner in another flat with his wife. They wish to sell both these flats and invest the proceeds in a larger apartment,. X wishes to know whether such joint investment in one flat will be sufficient for capital gains exemption.
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Yes. The main purpose of section 54 of the Income tax Act, 1961 is to give relief in respect of profits on the sale of a residential house. Section 54F of the Act, provides that where any capital gains arises from the transfer of any long term capital asset, other than residential house and the assessee purchases within one year before or after the date on which

QUERY: Section 54EC caps exemption at Rs. 50 lakhs, whether caps of Rs. 50 lakhs:

(a) Is applicable qua assets sold?

(b) Whether assessee can claimed exemption only in one year

(c) Whether limit of Rs. 50 lakhs is applicable to each financial year, if yes, then can assessee invest Rs. 50 lakhs in two financial years, falling within a period of six months after date of transfer?
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(a) No, section applies to assets sold during the year and not the qua asset.

(b) The exemption should be claimed in the year in which long-term gain arises and invested in long-term specified assets within six months from the date of transfer.

QUERY: I sold my residential house property for Rs. 1.2 crores in December, 2013 which I wanted to re-invest in NHAI bonds. I understand that the investment in NHAI bonds needs to be made within 6 months from the date of sale and the restriction for such investment is Rs. 50/- lakhs per financial year. Accordingly, I made a plan of invest Rs. 50/- lakhs in January, 2014 once and again in May, 2014 Rs. 50 lakhs whether I would get a exemption of Rs. 1/- crore from long term capital gain tax. However, my advisor informed me that there are some litigations involved in this point. Can you please clarify what exactly is the litigation involved and how it can be mitigated?If that is so why is this restriction of Rs. 50/- lakhs per financial year has been prescribed in the Act?
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Yes, In ITO v. Ms. Rania Faleiro [142 ITD 769] the Panji Tribunal has held as un-der:

“The plain reading of section 54EC(1) as well as the proviso thereto clearly sug-gests that the limit of Rs. 50 lakhs as given under the proviso is as per person per financial year. There is no ambiguity in the interpretation, Had there been an intention of the legislature to restrict the exemption of Rs. 50 lakhs, the legislature would have provided the embargo in this regard

QUERY: Investments made u/s. 54EC beyond time limit u/s. 139(1) i.e. before expiry of 139(4) time limit is eligible for exemption?
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The exemption up to Rs. 50/- lakhs would be available under section 54EC, if the capital gains arises from the transfer of a long term capital asset, (being the original asset) and the assessee has, at any time within a period of