I sold a Plot in the FY 2016-17 which I bought in 2010-11. I got a Long Term Capital gain amounting to Rs 10,50,000/-. I also have a business income of Rs 1,84,000/- I took a flat on rent from Nagar Nigam for which I paid Rs 3,50,000/- as transfer fee and spend around Rs 5,00,000/- on renovation of the flat. Is any rebate applicable on the amount I spend? Is the rent paid to Nagar Nigam exempted? My age is 52 Years. Navin Goel goelnav@gmail.com
Dear Navin
Sorry to inform you that no deduction is available on house rentals etc.
Deduction is available in case of buying/constructing a new residential house.
Please feel free to call/ revert in case of any doubts
Thanks and Regards
Abhishek Dugar
CA CS B.Com
Hi,
Neither, rent paid to Nagar NIgam is exempted nor amount spend on renovation.
You can invest the capital gain amount under section 54 EC in infrastructure bonds if period of six months has not been lapse since the sale of plot.
The Long Term Capital Gain (LTCG) will be taxable.
The transfer fee paid on a flat taken on rent from Nagar Nigam and the expenses on renovation of this flat can be treated as business expenditure (Revenue/capital) depending upon usage of such flat for your business purposes.
No. You are not eligible for any exemption as the flat you have taken is on rent basis and not ownership. The exemption is available only if you invest in residential property which should be registered in your name.
Hello Navin,
It is a bit confusing as to what is your query. Are you asking about capital gains ?. Deduction available against Capital Gain or Rent amount paid ?
