I am a senior citizen. Rencently i developed an ancestral property and now earn rental income exceeding 2.4cr annually. I have a HUF account also which earns 72lakhs annually. Frankly income cant be distributed to my wife and kids accounts cant be used due to some reasons. I am tired of paying huge taxes every month and i want to know if there is any relief for me 1. I am using 30% standard deduction, health insurance and LIC payments deductions to max amounts. Is there any other deductions that i can possibly use?? 2. If i transfer the property to a pvt ltd company / LLP coowned by me and my family memeber. What relief can I expect. And what is the difference between transferring property to LLP and transferring property to pvt ltd company. 3. Is there any other way in which i can save tax by my individual / HUF status. 4. I am also a proprietor in another firm with around 12 lakhs profit every year. Is there anyway, i can leverage this firm?? 5. I am ready to change my status to NRI. Doing this has any implication to saving tax?? Pls let me know.
1. Deductions u/s 80C, 80D, 80G are applicable in your case.
2. Transfer of property to LLP or Pvt. Ltd. co. will not change the character of income. It will be treated as income from house property and not business income.
3. I think not possible.
4. Firm is taxable at flat rate @30%.
5. No
Please contact me for detail discussion. my email id is aroravivek1982@gmail
Hello Sir,
The responses to your queries are as under:
1. If you have taken any housing loan for developing the property, you can claim the deduction of interest on such housing loan. Deduction of principle amount of housing loan is also allowed under section 80C but since you are already claiming 80C deduction to the max amount, it won't be allowed further.
2. The effective tax rate for a new company (including surcharge and cess) is 25.17% (under section 115BAA), which would be substantially lower than your slab rate. The maximum tax rate for a LLP is 35%, which would again be lower than your slab rate.
However, there might be tax implications on account of transferring the property to company/LLP.
Difference between company and LLP would be that although the tax rate of company is lower, dividend distributed by the company would again be taxable in the hands of the shareholders at slab rate. In case of LLP, the profits on which the LLP would have paid taxes would be totally exempt from tax in the hands of the partners.
With detailed planning, the entire arrangement can be structured in a tax efficient manner.
3. Not really.
4. No. Proprietor ship concern does not have a separate legal existence. Its income would be taxable at the slab rate applicable to you.
5. Changing the status to NRI can result into tax benefit in certain cases. However, in case of rent income, where the immovable property is situated in India, you will have to pay tax in India irrespective of your tax residency.
Thanks!
Best regards,
CA Yogesh Malpani
Hi
1. You can take benefit of section 80 C
2. No
3. No
4. No
5 No.
I would recommend you to book a phone consultation so that same can be answered in a better manner and discussed in detail.
Thank you.
Hi naman, Can u please send me a small private reply. Post that will book consultantation. [deleted]
Dear Sir,
Hope you are doing well !!
We may assist you in entire procedure.
It is advisable to take a phone consultation for detailed discussion.
Better to distribute your property to your family member if possible otherwise if you have income then should pay tax to GOI being citizen of country.
5, no effect if change to NRI status all income arise in India will be taxable