I am planning to buy a house and am planning to take a loan from a bank as well as my employer. Can I claim tax exemption on both loans?
- Tushar Singh
Under the Income tax Act, 1961 (Act), tax payers have been provided with a benefit of claiming deductions of interest and principal repayments on the loan taken by it to purchase or construct the house property. Interest on loan repayment is allowed to be claimed as a deduction under section 24 of the Act provided the tax payer furnishes a certificate from the person to whom interest is paid. Whereas principal repayment is allowed as a deduction under section 80C of the Act. However, principal repayment of the loan taken from the employer shall be allowed only if the employer falls under any of the categories of employer specified by the Act in this regard.
Thus, you shall be allowed to claim deduction of interest on both the loans obtained from bank and employer under section 24 of the Act provided the interest certificate is obtained from both the sources of loan. The principal repayment of loan obtained from bank shall be allowed as a deduction under section 80C of the Act. However, deduction of principal repayment of loan obtained from employer would depend whether your employer is covered under the prescribed category of employers provided by the Act.
Please note that the aforesaid deduction in respect of interest and principle repayment can be claimed only upto the limits prescribed by the respective sections. My father has gifted shares to my daughter, who is a minor. If I sell those shares what will be the capital gains? Will I have to pay tax?
- Rishabh Gupta
Under the Act, any income accruing to a minor child shall also be offered to taxation. However, such income is not charged to tax in the hands of the minor but gets included in the income of such parent whose total income is greater, except in the specified situations. In your case, the capital gains shall be computed by reducing the sales consideration with the indexed purchase cost of the shares incurred by your father. Such capital gains will be included either in your or your wife's income, whose income is greater and accordingly, tax will be paid by such parent.
The writer is director, Nangia Advisors LLP
