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Your Queries – Revenue Tax: No HRA tax profit if solely partner stays within the rented place

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By Chirag Nangia

I’m dwelling in Japan on a long-term deputation. My spouse stays in India. Can I declare HRA profit from my firm for the hire I’m paying for my spouse’s keep in India? My firm in India is deducting hypo tax from my wage.
— Sudheer Kumar Reddy

Salaried people, who dwell in rented homes, can declare the Home Lease Allowance (HRA). This allowance is for bills on rented lodging. Should you don’t dwell in a rented place, this allowance is absolutely taxable. In your case, since you aren’t dwelling within the rented home in India, you aren’t eligible to say the exemption.

I’ve a query on LTCG. An individual sells a home property in September 2019. He deposits the cash in capital good points scheme in a financial institution in March 2020. He’s unable to purchase a home inside two years of sale because of the pandemic. What are the choices to save lots of tax legally on the capital good points?
— Sumathi Sundarvasan

To avail the exemption beneath Part 54, capital good points on sale of property need to be re-invested in new residential property inside prescribed time restrict of two or three years. Nonetheless, since the time-frame is lengthy and capital good points are to be reported within the 12 months of sale, the Revenue Tax Act permits people to park the funds within the Capital Acquire Account on or earlier than furnishing return of revenue for max two years to buy a brand new home property and declare exemption. Additional, quantity you place in this may be withdrawn at any time to purchase or assemble a home.

Nonetheless, quantity as soon as withdrawn must be utilised inside 60 days and can’t be re-deposited within the account instantly.

Within the immediate case, two years have elapsed from date of deposit in Capital Acquire Account for buying a brand new home property, subsequently exemption beneath part 54 can’t be availed. Consequently, legal responsibility of tax on total capital acquire arises, which must be discharged within the 12 months wherein the interval of two or three years has elapsed.

The author is director, Nangia Andersen India. Ship your queries to [email protected]

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