The Hindu Business Line : Gains and duties

They are not directly in the picture. But if the actual sale consideration of a house is less than the value fixed by the stamp duty authorities, Section 50C of the Income-tax Act requires you to substitute this value instead of the actual consideration. In other words, the guideline value, as it is known in Chennai, holds sway wherever the actual consideration is less. But the general experience has been that the stamp duty authorities go in for higher valuation to garner higher stamp duty for the state government. In the event, if the buyer bears the brunt in the matter of stamp duty, it would be the seller's turn when it comes to capital gains.

A bungalow's worth

I have rented out my bungalow for Rs 10,000 a month but have simultaneously taken an interest-free deposit of Rs 10 lakh. What would be the taxable value of this bungalow?

Somashekara Reddy, Vijayawada

Your apprehension apparently is that the notional interest on deposit would be added to your rental income. Curiously, such a regime does not exist in the income-tax law relating to house property, unlike the wealth tax law. But if you have settled for a low rent (which may be amply compensated by the interest you may earn on the deposit) and such rent does not match the market rent, the assessing officer may plump for the market rent.

When two is too much...

Can I claim deduction under Section 80C for the two houses I bought recently?

Hemant Pavaskar, Mumbai

You may not be able to, because Section 80C like its predecessor Section 88 uses the prefix `a' before the term `house property' thereby fortifying the view that the Parliament has reserved this benefit only for one house at a time. You may choose the house that derives a greater benefit under this section but it cannot apply to both simultaneously. And you may exercise this choice year after year because there is nothing in the section to tie you down to the house you choose initially.

The author is a Delhi-based chartered accountant.

S. Murlidharan

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