The Hindu Business Line : Money sent to parents taxable?

Section 80C only allows you to claim stamp duty, registration fee and other expenses for the purpose of transfer to you of a house property as a deduction.

No deduction is provided for in respect of the expense incurred by way of stamp duty or registration duty for purchase of plot.

I have taken loan for a house that is registered in the joint names of my father and mother.

My father is retired and my mother is a house wife.

As I am repaying the loan, will it be possible for me to claim tax benefits in respect of the interest and principal repayment towards the housing loan? — Biju Kumar

Interest on housing loan can normally be claimed as a deduction under Section 24 in computing income from house property.

Similarly the principal repayment of a housing loan will normally qualify for deduction under Section 80C in computing the total income. Section 80C makes a specific mention of repayment of amount borrowed by the assessee.

This would only mean that the loan itself should have been taken by you for you to be eligible for the deduction.

Similarly, Section 24 provides for a deduction in respect of the interest on capital borrowed for purchase of the house.

The income from house property should be computed and included in the hands of the real owner and not in the hands of the registered owner.

If you are the real owner, when the income from house property is computed in your hands the deduction in respect of interest would also be available to you.

Similarly, the principal repayment of the housing loan would also be available to you as a deduction if you are the real owner.

Will the property tax paid for my own house qualify for deduction under Section 80-C? — Sachin Bhangale

If the property is let out, the property tax will qualify for deduction in computing income from house property.

On the other hand, if it is self-occupied and where the annual value of the property is taken as nil, no deduction can be claimed in respect of the property tax in computing income from house property.

In any case, Section 80C does not permit the deduction in respect of property tax. This deduction is available under Section 23 in computing the annual value of the property.

I have taken a loan of Rs 50,000 for giving a refundable deposit to my house owner.

While my house owner pays me no interest on the same, the loan bears an interest of Rs 6,000 per annum, which I pay.

Will this interest also be considered as part of the rent, which I pay and be eligible for exemption under Section 10(13A)? — Amit

This interest will not qualify for exemption under Section 10(13A). Section 10(13A) allows an exemption to an individual who is in receipt of house rent allowance and is also paying rent.

It would be too far-fetched to make a claim that the interest on the loan taken for giving the deposit to the land lord should also be taken as part of the rent.

I am planning to gift a sum of Rs 10 lakh to my cousin for his higher studies in abroad.

I propose to sell some shares, purchased by me more than four years ago, through a recognised stock exchange to mobilise the fund.

What will be the tax implications for me and my cousin? — Krishna

In your hands, there will be no tax implication on the gift as such.

The sale of shares will also not give rise to any tax incidence in your hands since the capital gains if any would be exempt as the sale is through a recognised stock exchange where Securities Transaction Tax would be payable at the time of sale and further since the gain would be long term, your having held the shares for a period exceeding 12 months.

In the hands of your cousin, the receipt, by way of gift from you, will be treated as his income under Section 56(2)(vi).

You may note that this Section seeks to bring to tax any some of money exceeding Rs 50,000 in the aggregate in a year if the same is received without consideration.

Though such sums received from certain relatives are excluded, there is no exclusion in the Section for a sum received form a cousin and hence a tax incidence will arise in the hands of your cousin.