Get tax break of up to Rs.10,000 on savings account interest
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I got interest of Rs.50,000 from my savings account for 2015-16. How much tax do I have to pay on the interest?
The interest earned on a savings bank account maintained with a specified bank, cooperative society or post office is taxable in the hands of the individual as ‘income from other sources’. One can claim deduction from total income subject to a maximum cap of Rs.10,000 per financial year (FY) under section 80TTA of the Income-tax Act, 1961. Depending upon the applicable income tax slab rate, you will be taxed on the balance interest amount, which is Rs.40,000. In case your total income exceeds Rs.1 crore during the FY16, surcharge at 12% will be applied on the basic tax rate. Also, education cess of 3% on basic as well as surcharge (if applicable) shall be levied.
Also, it is proposed in the Finance Bill 2016 to increase the surcharge to 15% from 12% on total income exceeding Rs.1 crore.
My mother wants to gift her immovable property in Delhi to me. The property is a building with a ground floor and two other floors. It measures around 130 sq. yards. What are the tax implications?
Any immovable property received by an individual from any person during any FY without consideration and if the stamp duty value of the property exceeds Rs.50,000, is taxed under the head ‘income from other sources’ in the hands of the recipient. The term property defined in the domestic tax law includes “immovable property” being land or building or both. But an exemption is given if the asset is received from a relative, who include, among others, the individual’s mother. Accordingly, there should not be any tax implications in your hands if such a property is gifted to you. With respect to the above transaction, it would be advisable to have documentation in place. Please note that any subsequent income from letting out or sale of the asset shall be taxable in your hands depending on the nature of income.
If I get my self-occupied house renovated, will I get any income tax relief on the amount spent?
Under the domestic tax law, expenses incurred on repairs or renovations of a self-occupied property do not qualify for any tax benefits or deduction. However, if you avail a loan for renovations, you could claim maximum deduction of up to Rs.30,000 per FY towards interest paid on the loan.
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