1. Section 80EE: Additional Deduction of Interest on Home Loan
Crux of Section: Deduction of Interest payable on loan taken from financial institution for 1st residential house property is available.
Applicability: Only Individual
Amount of Deduction: Interest payable or 1 lakh whichever is less
(i) the loan has been sanctioned by the financial institution during the f.y.2013-14;
(ii) the amount of loan sanctioned does not exceed 25 lakh rupees;
(iii) the value of the residential house property does not exceed 40 lakh rupees;
(iv) the assessee does not own any residential house property on the date of sanction of the loan.
a) Deduction is available even if interest is not actually paid as the word “ Payable” is used.
b) Loan must be taken for acquisition for such property only i.e. renovation, improvement not covered.
c) Deduction is available in respect of 1st residential house property only
d) Loan must be taken from a financial institution and it should be fresh loan.
e) Value of such property must not exceeds 40 Lakhs
f) Amount of loan must not exceeds 25 Lakhs
g) Interest amount not utilized can be carried forward. For e.g. If total additional deduction claimed u/s 80EE is only Rs.93,000 for the Year 2013-14 then unutilized amount of Rs.7,000 can be carried forward for deduction in next year i.e. Year 2014-15.
h) Loan taken in earlier years for which installments have been paid and now the loan amount comes under Rs.25 lakhs, this type of loan will not be considered as fresh/new loan for deduction u/s 80EE, even if same is transferred from one bank to another.
i) Loan taken for construction of part of property will not be eligible.
2) Section 194-IA: TDS of 1% from consideration payable for transfer of Immovable property:
Crux of Section: Consideration for transfer of any immovable property other than agricultural land of 50 lakhs and above attracts TDS @ 1% – Applicable from 1 June 2013
a) This provision will be applicable in respect of transactions effected on or after 01.06.2013.
b) It seeks deduction of tax at source on transfer of certain immovable property other than agricultural land referred to in section 2(14).
c) Any person being a transferee who is liable to pay to a resident by way of consideration for transfer of any immovable property shall at the time of credit of such sum to the account of the transferor or at the time of payment in whatever manner, has to deduct tax at source at 1 percent.
d) The liability to deduct tax at source is at the time of actual payment or credit of such sum to the account of the transferor whichever is earlier.
e) The threshold limit for application of tax deduction at source is Rs.50 lakhs. Where the transaction is less than Rs. 50 lakhs, the liability to deduct tax at source will not be applicable.
f) Since the expression used in the section is “any sum by way of consideration” the provisions of section 50C will not interfere. Hence, tax deduction at source will be with reference to apparent consideration only.
a) Consideration may be given before 1st June
b) Since TDS is always deducted at the time of credit or payment whichever is earlier, so if consideration is credited before 1st june, say 25th May and consideration is paid on or after 1st June, the liability to deduct tax does not arises.
3) Section 56 (Amended): Tax on Purchase of Immovable Property at insufficient consideration
Applicability: Individual or HUF
Crux of the Section: Purchase of immovable property by individual or HUF for inadequate consideration (Consideration minus Stamp duty value > 50,000) taxable in the hands of the recipient under “Income from other Sources”.
i) If consideration is less than stamp duty value by an amount exceeding Rs.50,000.
i) Since this section is applicable only on HUF and Individuals the Immovable Property can be purchased on the name of other assessee i.e. Private Limited Company.
D) Section 43CA – Application of Stamp Duty Valuation of assets other than Capital Assets
Crux of the Section: Seller of Land or building or both, which is held as stock in trade have to pay tax on (stamp duty value – consideration).
Applicability: All assessee
i) If consideration is less than stamp duty value arising on account of transfer of an asset being land or building or both (not being a capital asset) shall be substituted by the valuation done by stamp valuation authorities.