The Hindu Business Line : Travel first-class A/C for exemption

I will be returning from Ahmedabad by train. Can I claim the exemption in respect of LTA on the expenditure incurred for travel by train and by car? Manoj Parekh

You have not indicated whether the travel between Ahmedabad and Palitana is possible by train.

You need to check if there is a railway link between these two places or a recognised road service. You can claim exemption in respect of the expenditure incurred on travel by train as well as by car.

Your claim for exemption will, however, be restricted to the First Class A/C fare between Chennai and Ahmedabad and back. In respect of the travel from Ahmedabad to Palitana, the exemption will be restricted to the First Class A/C fare between the two places.

If there is no rail route, it will restricted to first class or deluxe fare by a recognised public transport system. If there is also no recognised public transport system, the exemption will be restricted to the First Class A/C fare between the two places as though the journey is performed by rail.

You may note that the exemption cannot exceed the expenditure incurred and that the same will be restricted to the conditions stipulated in Section 10(5) read with Rule 2B.

I took a housing loan in October 2005. I am repaying the loan with interest.

I have let out the house on rent. I live in a rented house. I have taken a personal loan and used it for renovation of the house that I own.

Can I get tax benefit under Section 80C and Section 24 in respect of the principal and interest, respectively, on the personal loan used for renovation of the house? Baji

The interest on the loan taken for renovation of the house property can be claimed as a deduction under Section 24.

The deduction under Section 80C in respect of the principal repayment cannot be claimed as a deduction since Section 80C does not permit a claim for deduction in respect of loan taken for renovation. It only permits a deduction in respect of repayment of loan taken for purchase or construction of the house property.

I am a non-resident. I purchased a house in Mumbai in the names of my wife and I out of funds from the NRE account. I paid Rs 9 lakh for the property. I spent another Rs 4 lakh on renovation. I have not retained the bills for the expenditure on renovation.

I propose to sell this house for Rs 21 lakh. Can I claim benefit in respect of the expenditure on renovation ? If I were to purchase a land, can I claim tax exemption? Sankar

In the light of the fact that you do not have the supporting bills for the expenditure incurred, you may not be able to prove that you have incurred expenditure on improvement of the property. Normally, the expenditure incurred towards renovation and modification should have been allowed as cost of improvement to the property. You may consider taking a valuation report, which gives the details of the renovation and modification and the estimated cost could be used to support your claim for taking the same as cost of improvement. You can claim no exemption by purchasing a land. Section 54 allows an exemption if you purchase another residential house. You may also note that if you construct a residential house within three years on the land, which you acquire, the benefit of the exemption can be claimed in respect of the cost of the land subject to your satisfying the other conditions in Section 54.

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