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STT Shares Tax Exempt

Monday, October 03, 2011

Anand Tibrewala
is a CA and Senior Partner at the leading Chartered Accountancy firm, AD & Company

I had bought a residential property in Mumbai, some years ago with the help of a housing loan from a Bank. In the current year I have been transferred out of Mumbai by my employer. Hence, I have rented out the house owned by me in Mumbai. I am likely to pay total interest of Rs 3.60 Lakhs on this housing loan in the current year. Advice how much interest would be allowed to be deducted out of my income i.e. Rs 1,50,000 or the full interest paid by me.
—J.S.Joshi, Chembur

Interest paid for a self occupied house property is restricted to Rs. 1,50,000/-. However, if a property is rented or leased during the year then it does not remain a self occupied property. Hence, the entire interest paid during the year can be claimed as deduction. Therefore, total interest of Rs 3.60 lakhs would be allowed to be deducted out of your income in the current year.

I have incurred long term capital loss on sale of certain shares through the stock exchange and I have paid securities transaction tax as applicable. Simultaneously I have made some long term capital gains on sale of some jewellery in the same year. Please advice whether the shares loss could be set off against jewellery profit?
—Krishna.Singh, Kurla

The long term capital gain on sale of shares on which securities transaction tax is paid is exempt from tax. Hence, any loss arising from the similar transaction needs to be ignored. In view of this ignorance the profit on sale of jewellery would be entirely taxable without any set off.

I have lost my PAN card. Is it possible to obtain a duplicate PAN Card?
-Raju.Soban, Kurla

It is possible to obtain a duplicate PAN Card. You need to fill a form for change in PAN particulars and submit the same with an address proof and an identity proof. You also need to provide evidence of your old pan card for claiming the same PAN No. After filing the documents correctly within 2 weeks you can expect the new PAN card.

I am a NRI. To take care of my parents in India I remit funds regularly to my father’s account. Please advice whether there is any tax implication on this transaction?
—Prashant Gharat, Thane

You are Non-resident in India. Hence, your earnings overseas is not taxable in India. Out of your savings when you transfer funds in India in your fathers account, it is a transfer without adequate consideration. Further since you have blood relation with your father the transfer without adequate consideration cannot be taxed as gift. Therefore, there is no tax implication on the said transactions in India.

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