Financial Daily from THE HINDU group of publications
Sunday, Jul 10, 2005
Financial Daily from THE HINDU group of publications Sunday, Jul 10, 2005 |
|
|
|
|
|
Investment World
-
Income Tax Columns - Tax Talk Can spouse make part payment of housing loan? T. Banusekar
The flat is in the names of my wife and me. My annual gross salary is around Rs 8 lakh. My wife also has a taxable income. Is it possible for my wife to pay a part of the EMI from her income so that she will also be able to claim the deduction under Section 80C in respect of the principal repayment of the housing loan? Anonymous Reply It appears that you have been claiming the tax benefits in respect of the principal repayment of the housing loan and the interest on the housing loan. Having done so is tantamount to admitting that you are the real owner of the property and also that you are the borrower of the loan. To change the aspect relating to the ownership and the burrowing of the loan will not be possible. It is apparent that you are seeking to do so only to get a tax advantage. It will not be possible to unsettle the existing clear factual position to get a tax advantage. Query I work in an engineering college. The Finance Act, 2005, has introduced a deduction under Section 80C along with the deductions that were earlier available under Sections 80CCC and 80CCD. Can the deduction of Rs 1 lakh under these sections be reduced directly in computing the total income. Neeraj Sachdeva Reply The deduction under Sections 80C, 80CCC and 80CCD can be reduced in computing the total income of an assessee. You can take the entire amount of investment or payments made which qualify for deduction under these sections and reduce the same in arriving at the total income. Section 80C allows a maximum deduction of Rs 1 lakh, Section 80CCC allows a maximum deduction of Rs 10,000 and Section 80CCD, which allows a deduction on contribution to a pension scheme of the central government by new employees, does not place any ceiling limit. Also, Section 80CCE places a limit on the quantum of deduction whereby the maximum deduction under Sections 80C, 80CCC and 80CCD cannot exceed Rs 1 lakh in aggregate. Query I took a housing loan in August 2004. For the year ending March 2005, I have claimed tax benefits in respect of the EMI on theloan. I now understand that some changes have been made in the Finance Act, 2005, in respect of claiming tax benefits for the principal repayment. How do these changes apply? Sudha Priya Sampat Reply Principal repayment of housing loan earlier used to qualify for rebate at the appropriate percentage. The rebate was to be reduced from the tax payable by the assessee. The maximum amount that was eligible for rebate was Rs 20,000. With effect from the assessment year 2006-07 (previous year 2005-06), the principal repayment will qualify for a deduction in computing the total income of the assessee. It is on such total income that the tax is computed. The ceiling limit of Rs 20,000 in respect of the principal repayment will not apply. However, the total quantum that would qualify for deduction in respect of all investments and payments stipulated in Section 80C cannot exceed Rs 1 lakh. Query I am eligible for a leave travel allowance (LTA). The evidence for my travel from Mumbai to Goa and back is in the form of a receipt from the travel agent. Will this suffice to claim exemption in respect of LTA? Can my employer allow the exemption in computing the tax to be deducted at source? Rajiv Kumar Reply You can claim exemption under Section 10(5) in respect of the LTA based on the receipt from the travel agent towards hire charges of the car. Your employer can take into account the exemption that you will be eligible for on the basis of the receipt in computing the tax to be deducted at source on your salary. You may note that the exemption will be available subject to limits stipulated by the Section and subject to satisfying the conditions stipulated therein.
Mail your queries to taxtalk@thehindu.co.in or by post to `Tax Talk', Business Line, Kasturi Buildings, 859, Anna Salai, Chennai-600002.
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2005, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|