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Showing posts from January, 2013

“NEW PENSION SCHEME & INCOME TAX IMPLICATIONS”

TAX TALK-28.01.2013-THE HITAVADA

TAX TALK BY CA. NARESH JAKHOTIA Chartered Accountant
“NEW PENSION SCHEME & INCOME TAX IMPLICATIONS”
Query 1] I am a Government employee working with Indian Railways. I have taken a house building loan from ICICI bank on 2007 which I later transferred to a co-operative bank named Dr. Babasaheb Ambedkar Bank in 2011. Initially, when my loan was in ICICI bank, I was given exemption on income tax. But, after transferring the loan to co-operative bank my office account's dept denied giving any exemption in income tax on the basis of my home loan giving the reason that it is from a co-operative bank. Please guide, whether home loan from Co-operative bank doesn’t qualify for income tax exemption? Or, are there different tax exemption rules for nationalized banks and co-operative banks?[K.K.Roy-dev_roy000@yahoo.com] Opinion: The deduction is available even in respect of the loan taken from the co-operative bank. The deduction us/ 80C & U/s 24(b) towards P…

“LOAN TAKEN FOR PURCHASE OF PLOT – WHETHER ELIGIBLE FOR HOUSING LOAN DEDUCTIONS?”

TAX TALK-21.01.2013-THE HITAVADA

TAX TALK BY CA. NARESH JAKHOTIA Chartered Accountant
“LOAN TAKEN FOR PURCHASE OF PLOT – WHETHER ELIGIBLE FOR HOUSING LOAN DEDUCTIONS?” Query 1] 1.I have a query. I took a loan from SBI (May, 2012) for Rs. 20,00,000/- for purchasing a residential plot under Govt. scheme. The bank gave me a loan under the realty category. My monthly installment is Rs 24, 465/ but I'm not getting any rebate in income tax. My query is, how I can get the income tax rebate on the interest amount I'm paying to the bank every year.
For that,
A.Do I need to build one room, kitchen and toilet and then start claiming the income tax exemption? Or B.Should I go for additional loan from the bank to construct a house? My query is, if I go for "A", will I get the income tax exemption? Or if I go for option "B", will I get exemption on the new loan only or whether it will be addition of two loans interest? Kindly suggest me. 2.My second query is, as my plot is mo…

“WORK IN PROGRESS & REVENUE RECOGNITION IN THE CASE OF BUILDERS & DEVELOPERS”

TAX TALK-14.01.2013-THE HITAVADA

TAX TALK BY CA. NARESH JAKHOTIA Chartered Accountant
“WORK IN PROGRESS & REVENUE RECOGNITION IN THE CASE OF BUILDERS & DEVELOPERS”
Query 1] I have a question about how to calculate WIP (Work in Progress) in case of Builder and Developers business. Please provide any illustration if possible for the revenue recognition in the case of Builders & Developers. I have read AS 7 but could not understand. Whether WIP in first year of developers business = Land Purchase for Development + Direct Expenses incurred on such land? What will be the treatment in next year if some of the flats sold out in second year? For example, 1.In 2010: Rs. 20 Lacs (Land Cost) (having 10 flats), Rs. 1 Lacs (Direct Exps such as stamp duty etc), what will be WIP? 2.In 2011: Rs. 50 Lacs sale of Flats (5 flats sold), WIP in this year? Please elaborate. [Rajesh -advrajesh_3706@hotmail.com] Opinion: 1.A real estate project normally get spreads over for more than one accounting perio…

Rajiv Gandhi Equity Savings Scheme, 2012 [RGESS]

[TO BE PUBLISHED IN PART II, SECTION 3, SUB-SECTION (ii) OF THE GAZETTE OF INDIA, EXTRAORDINARY, DATED THE 23rd
Government of India November, 2012]
Ministry of Finance
Department of Revenue
Notification
New Delhi, the 23rd
(Income-tax) November , 2012.
S.O. 2777(E).— In exercise of the powers conferred by sub-section (1) of section 80CCG of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following Scheme, namely:-
1. Short title, commencement and application. - (1) This Scheme may be called the Rajiv Gandhi Equity Savings Scheme, 2012.
(2) It shall come into force on the date of its publication in the Official Gazette.
(3) This Scheme shall apply for claiming deduction in the computation of total income of the assessment year relevant to a previous year on account of investment in eligible securities under sub-section (1) of section 80CCG of the Income-tax Act, 1961.
2. Objective of Scheme.-The objective of the Scheme is to encourage the savings of the small inves…

Guidance Note on Accounting for Real Estate Transactions (Revised)

GN(A) 23 (Revised 2012)

Guidance Note on Accounting for Real Estate Transactions

Foreword
Growth of the real estate sector in the recent past in India, indicates the
importance of this sector in Indian economy. Along with fulfilling one of the
basic necessities for human existence, i.e., housing, this sector has also been
used as a key tool by the Indian Government in achieving an overall socioeconomic
growth during the last few decades. The development in the real
estate market encompasses growth in both commercial and residential spheres.
As there are large numbers of entities in this segment, there is intense pressure
amongst the entities to stay on top in the investors’ choice list.
The Institute of Chartered Accountants of India (ICAI), while realising the role
of this sector in fuelling growth of Indian economy and recognising need for
guidance on accounting for real estate sales, in 2006, issued Guidance Note
on Recognition of Revenue by Real Estate Developers.
With the fast growth of this…

“NEW RETAIL INVESTOR CAN CLAIM DEDUCTION U/S 80CCG UP TO RS. 25,000/-”

TAX TALK-07.01.2013-THE HITAVADA

TAX TALK BY CA. NARESH JAKHOTIA Chartered Accountant “NEW RETAIL INVESTOR CAN CLAIM DEDUCTION U/S 80CCG UP TO RS. 25,000/-” Query 1] I am a Central Government employee & my date of birth is 11-03-1953. I am Retiring on 31-03-2013 on superannuation. My query is that as I am completing 60 Years on 11-03-2013, am I eligible for exemption limit of Income-tax of Rs. 2,50,000/- being a senior citizen during the year 2012-2013? Please specify. [K. S. Ikhar, Pratap Nagar, Nagpur-p_ikhar@rediffmail.com] Opinion: Senior citizen shall be entitled for the basic exemption limit of Rs. 2.50 Lacs for the F.Y. 2012-2013. A senior citizen is a person who has completed the age of 60 years at any time during the previous year. Since you will be completing the age of 60 years during the F.Y. 2012-13, you are certainly entitled to the basic exemption limit of Rs. 2.50 Lacs for the financial Year 2012-13.
Query 2] I have shifted from Nagpur (Maharashtra) to Bangalore (Karnataka)…

Investment of Rs. 1 crore in bonds specified under section 54EC- Whether Possible?

AND THE CONTROVERSY CONTINUES...

Investment of Rs. 1 crore in bonds specified under section 54EC- Whether Possible:

Limit of investment for the purposes of section 54EC is Rs. 50 lakhs in a financial year. Investment within 06 months is the investment for that financial year in which transfer has taken place. But, any subsequent investment is to be considered as part of the investment of financial year in which transfer has taken place. Therefore, even if the assessee manages his affairs in such a way that investment of Rs. 50 lakh is made in one financial year and investment of another Rs. 50 lakh is made in another financial year but within the period of six months from date of transfer then also deduction under section 54EC cannot exceed Rs. 50 lakhs.- Vide Asstt. CIT v. Raj Kumar Jain & Sons (HUF) (2012) 48 (II) ITCL 2 (JP-Trib)