Your queries: Income Tax; Working abroad? Can’t claim HRA for family back home

By Chirag Nangia

* I am working abroad and my wife and children stay in India. How can I claim HRA for the rent I pay for them in India?

—Deepak Jana

Salaried individuals, who live in rented houses, can claim the House Rent Allowance (HRA). If you don’t live in a rented accommodation, this allowance is fully taxable. In your case, since you are not living in the rented house in India, you are not eligible to claim the exemption.

* I purchased a flat two years ago and want to sell it now. How do I compute capital gains?

—G R Sunder

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Assuming you have held the property for a period exceeding 24 months, the capital gains on sale is classified as long-term capital gain (LTCG). For computing LTCG, the indexed cost of acquisition, indexed cost of improvement and expenses (incurred wholly and exclusively in connection with the transfer) is deducted from the sale proceeds. LTCG so computed is taxed at the rate of 20%. There are no provisions for concession in stamp duty payable at the time of purchase of another residential property. However, capital gains is tax exempt if you buy another house within one year before or two years from the date of transfer.

* Can I get tax benefit on educa-tion loan from NBFC for my son?

—Ashok Behl

As per Section 80E, anyone who takes a loan from any financial institution or approved charit-able institution for pursuing higher education, whether in India or abroad, can claim deduction on the amount of interest paid for a consecutive period of eight years, beginning from the assessment year in which he has started paying the interest on loan or until the assessment year in which the interest is paid in full, whichever is earlier. Education loan can be taken for self, spouse, children or student for whom you are the legal guardian.

* I stay with my parents and pay them Rs 20,000 every month as rent. Should I deduct TDS?

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—Sharad Thamli

As per Section 194-IB, with effect from June 1, 2017, an individual paying monthly rent above Rs 50,000 shall deduct TDS on rent at 5%. Since your monthly rent is less than that, you are not liable to deduct TDS on rent.

The writer is director, Nangia Andersen India. Send your queries to [email protected]