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Wednesday, November 30, 2011

GIFT TAX - Land & Property

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GIFT  TAX - Land & Property : A - Z GUIDE

If the value of the gifts received by you during the financial year is above Rs. 50,000, you will have to pay tax on it. However, there are some exceptions to this gift tax.

According to the Indian Income Tax Act (as well as the New Income Tax Code, which is likely to come into effect from, 2012 , April), if you receive a gift whose value exceeds 50,000, it will be clubbed with your income and you will have to pay tax on it. This rule is also applicable if the combined value of all the gifts received by you during a financial year exceeds the limit.

Land & Property..!
*  If a property (Land and House) is bequeathed to you under a Will, given on the occasion of your marriage or gifted by a local institution or authority, you won’t be taxed.

* If you have received real estate (land or property) as a gift, it is advisable to get a gift deed signed by the donor or get the property registered with the registrar. This will help you avoid legal problem in future.

* In the case you are gifting real estate, you can add a condition/clause stating that if the recipient dies within your lifetime and does not have any descendants, the property should return to you.

* Property can't be gifted to a foreign national and you can gift residential or commercial property to an
NRIs (Non Resident Indians).

* You can't give  NRIs agricultural/plantation land.

Fair Value Important..!
Here one important notable point,If the total value of your gifts exceeds Rs. 50,000, you have to pay income tax on the entire amount, not simply on the difference amount.

This income tax rule applies even in cases where you have bought a product from someone at a much lower price than its fair value.

For an example if the depreciated value of a car is Rs. 6 lakh (Original bought value two years a ago Rs. 10 lakh), but you buy it for Rs.3 lakh, the balance amount Rs. 3 lakh will be considered as a gift and clubbed with your income. However, if you pay 5.6 lakh, you will not have to pay tax as the value of the gift  the balance amount is Rs. 40 lakh) is less than Rs. 50,000.

The fair market value of a gift is the price that it would fetch if it is sold in the open market on that particular date as determined by a registered valuer.

In the case of  land and property, the  Guideline value stamp will be considered as the market value.
Specified Relatives..!

Gifts given by specified relatives are exempt from income tax, regardless of their value. Such relatives include spouse, siblings, brothers/sisters of spouse/parents, grandparents and grandchildren as well as their spouses.

A gift given in contemplation of death by the donor will also be exempt. If a person knows that he is going to die in a few days and gifts his assets to a person, the recipient is exempt from paying tax.

Marriage engagement & Marriage..!


Sametime, if you receive an expensive gift during an marriage engagement, anniversary or birthday party, it will be taxed. But, If you have received the gift on your marriage, is it exempt from tax.

How income tax calculated?


The Indian Income Tax act, the value of the gift is clubbed with your total income and taxed according to your tax slab (10-30% tax, plus surcharge) on your total income.

In the case you earn an income from the gift, it will be taxable under the heading ‘Income from other sources’.
For instance, if you get rental income from a house that has been gifted to you, this will be taxed. A gift given to your minor child or income from that gift will be clubbed with your income.
Suppose, you have gifted a house or shares or mutual fund units to your minor child (or spouse), it will be tax exempt. However, the rental income or dividend earned will be clubbed with your income and taxed.

But if you give such assets to your parents, who have no source of income, the income earned from it will be considered as their income. This can help you reduce your income tax burten.

Income Tax File Return
Any one need to be careful about assessing the gifts you have received in a year while filing your income tax fle return. If any one fail to do so, not only will he/her have to pay the interest liability on outstanding payments, but could also end up paying a fine that is one to 3 times the amount of tax he/her were supposed to pay.

What can be gifted? - Highlight points
#  Real estate (Land and Property - residential and commercial)

#  Stocks and Mutual Funds/ bonds of companies.

#  Paintings and sculptures.

#  Jewellery and Gold and silver bars and coins.



When is it exempt from tax? - Highlight points

#  If the total value of the gifts received in a financial year is less than Rs.50,000.

#  If you have received the gift on your marriage.

#  If the asset has been gifted by specified relatives (Like Spouse/Siblings/Brothers/Sisters of Spouse/Parents), regardless of its value.

#  If the asset has been bequeathed to you through a Will.




Also Read
Home Loan Tax benefits : The Terms and conditions..!

The Income Tax benefit of exchange property

Property : Income Tax on Capital Gains


Chennai Property Registrations: Continue to Grow

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The stamp duty is a major source of revenue Tamilnadu government. The State Government levies a stamp duty of  8% , which goes to the local body &  1% registration fees on the value paid.  Between April and October this year (2011), the state has earned Rs 3,200 crore in stamp duty collection; this is 16%  higher than the period last year, while the number of documents registered has gone down by abouty 50,000, a 3% drop.

The Tamilnadu capital Chennai poropery  registrations continue to grow by 20% in Between April and October this year in value terms.

Vellore and Kanchipuram, large urban centres, whose growth is linked to Chennai, are also growing. Coimbatore, an industrial hub in the Western part of the State is another growing city. But cities like Thanjavur & Tiruchi, transactions are down.

Normally a guideline value is a reference for the sub-registrars who handle the registration of property documents, and ensure that the stamp duty is paid on the transaction value which is appropriate for the property.

Indian Real Estate shares – Intraday Tips For 30 November 2011

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Recommendations for 30 November 2011
Scrip
Trigger
Price
Stop Loss
Target 1
Target 2
DLF
BUY ABOVE
204.70
202.85
206.95
210.05
SELL BELOW
200.65
202.45
198.45
195.45

Scrip
Trigger
Price
Stop Loss
Target 1
Target 2
UNITECH
BUY ABOVE
23.50
23.30
23.75
24.10
SELL BELOW
23.05
23.25
22.80
22.45
 
Top of Form

Bottom of Form
Scrip
Trigger
Price
Stop Loss
Target 1
Target 2
IBREALEST
BUY ABOVE
65.60
65.05
66.35
67.35
SELL BELOW
64.30
64.90
63.60
62.65

Scrip
Trigger
Price
Stop Loss
Target 1
Target 2
HDFC
BUY ABOVE
642.05
636.25
649.10
658.80
SELL BELOW
629.30
635.00
622.40
613.05
HDFC
BUY ABOVE
82.85
82.10
83.75
85.00
SELL BELOW
81.20
81.95
80.30
79.10

Scrip
Trigger
Price
Stop Loss
Target 1
Target 2
ANANTRAJ
BUY ABOVE
45.90
45.50
46.45
47.15
SELL BELOW
45.00
45.40
44.50
43.85
 
Top of Form

Bottom of Form
Scrip
Trigger
Price
Stop Loss
Target 1
Target 2
SOBHA
BUY ABOVE
241.75
239.60
244.40
248.10
SELL BELOW
237.00
239.10
234.35
230.85

Scrip
Trigger
Price
Stop Loss
Target 1
Target 2
PHOENIXLTD
BUY ABOVE
190.30
188.60
192.40
195.30
SELL BELOW
186.55
188.20
184.50
181.70

Scrip
Trigger
Price
Stop Loss
Target 1
Target 2
ORBITCORP
BUY ABOVE
28.35
28.10
28.65
29.10
SELL BELOW
27.80
28.05
27.50
27.05

Scrip
Trigger
Price
Stop Loss
Target 1
Target 2
PARSVNATH
BUY ABOVE
36.70
36.35
37.10
37.65
SELL BELOW
35.95
36.30
35.55
35.05
 
Top of Form

Note :  It should not be taken as an assured recommendation to Buy or Sell a referenced security. The data given is for informative purpose only.
Bottom of Form

Tuesday, November 29, 2011

L&T Infra. Finance : Tax-saving Long Term Infrastructure Bonds

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L&T Infrastructure Finance Company Limited to issue Tranche 1 Bonds starting , on November 25, 2011, through a Public Issue of Long Term Infrastructure Bonds with a Face Value of Rs. 1,000 each in the nature of Secured, Redeemable, Non-Convertible Debentures having benefits under Section 80CCF of the Income Tax Act, 1961,  aggregating up to Rs. 1,100 crore for 2011-12


Press conference to announce the L&T  Tax-saving Long Term Infrastructure Bonds

The Minimum Subscription will be Rs. 5,000 and in multiples of Rs. 1,000 thereafter.

The Bond Issue will close on December 24, 2011. The first Tranche of Bonds will carry an interest rate of 9% per year payable annually or compounded annually. The Bonds are proposed to be listed on BSE. 

 Bonds Rated..!
The Bonds have been rated ‘CARE AA+’ by CARE and ‘[ICRA] AA+’ by ICRA considered to offer high safety for timely servicing of financial obligations.

The Bonds will carry a minimum Lock-in period of Five  Years from the Date of Allotment and can be redeemed after Ten Years from the Date of Allotment. The Bond will be issued in dematerialised form and trading can also happen in demat form post the Lock-in period of five years from the Deemed Date of Allotment. Redemption /Maturity Date shall be Ten years from the Deemed Date of Allotment.

In these Bonds, the Bondholder has 3 exit options. The first one is at end of 5 years, the second after 7 years and the third after 10 years which is at the time of redemption. Bonds can be held either in the physical or in demat form.

In the case of Series 1 of the Bonds, the interest rate is 9% payable annually and in the case of Series 2, the interest rate is 9% compounded annually payable at the end of maturity or buyback. The maturity is 10 years from the deemed date of allotment.

80CCF Benefit..!

80CCF Benefit: The Bonds have been classified as “Long Term Infrastructure Bonds” as per the terms of Section 80CCF of the Income Tax Act. As notified under Section 80CCF, an amount, not exceeding Rs. 20,000 per annum, paid or deposited as subscription to Long Term Infrastructure Bonds during the previous year relevant to the assessment year beginning April 01, 2012, shall be deducted in computing the taxable income of a resident individual or Hindu Undivided Family (HUF). In the event that any applicant applies for Bonds exceeding Rs. 20,000 per annum, the aforesaid tax benefit shall be available to such applicant only to the extent of Rs. 20,000 per annum.

The Lead Managers to the Bond Issue are ICICI Securities Limited, JM Financial Consultants Private Limited and Karvy Investor Services Limited. The Co-Lead Managers to the Issue are SMC Capitals Limited, Bajaj Capital Limited, RR Investors Capital Services (P) Limited, Integrated Enterprises (India) Limited. The Debenture Trustee to the Issue is Bank of Maharashtra.

About L&T Infrastructure Finance Company Limited 


L&T Infrastructure Finance Company Limited incorporated in 2006, is registered with the RBI (Reserve Bank of India) as a systemically important non deposit taking NBFC and an IFC.
The Company has also been granted the status of Public Financial Institution (PFI) in the current fiscal by the Ministry of Corporate Affairs.

The business comprises the provision of financial products and services for its customers engaged in infrastructure development and construction, with a focus on the power, roads, telecommunications, oil and gas and ports sectors in India.  The Company is also registered with the RBI as an Infrastructure Finance Company which allows it to optimize its capital structure by diversifying its borrowings and accessing long-term funding resources, thereby expanding its financing operations while maintaining its competitive cost of funds.

Sales Document Don't Reflects the Guideline Value, the Property Document Won't be Registered

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In Tamil Nadu, now property buyers could get their documents registered, even if the values quoted in the documents didn't comply with the guideline value fixed by the government authorities. 

The guideline values so far have been an informal reference point with no statutory backing, the authorities couldn't stop the registration of the undervalued document. Their only choice was to refer the issue to the Special Deputy Collector - (SDC) Registrations  who could reexamine the guideline value, but this could be followed with a protracted legal battle. Soon, this practice will be changed.   

Sales document must reflects
the guideline value..!

Once the revised guidelines are formally approved by the Tamil Nadu government, the parties in a transaction are bound by the guideline value. Unless the sales document reflects the guideline value, or the market value if it is higher, the document won't be registered. Only a pending registration number is issued, and the document is referred to the Special Deputy Collector for guideline value fixation.

But the transaction could be concluded, registration done, and the dispute wouldn't be reflected in the EC (Encumbrance Certificate). So, for years, the property could actually change hands, even with the dispute pending. But now, with changes in Section 47 A of the Indian Stamp Act, 1899, by Tamil Nadu Act 13 of 2008, notified in June 2010, the guideline values gain teeth, and they are now  market value guidelines of properties.

Every year guideline value increase..!
Another one major changes proposed. From 2012,  regularly every year guideline values will be increase, more frequently if needed, for areas where market values are growing fast.
This would help the government tap the full potential from this revenue source and also reduce the financial burden to the people. 


Also Read
Documents Pending : TN Govt announces Samadhan scheme

Share Review - Sobha Developers

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Share brokerage Company and the Bank  Morgan Stanley  believes that real estate firm Sobha Developers share price will rise in absolute terms over the next 30 days as short term valuation has turned much more compelling due to recent under performance versus the benchmark index.

Morgan Stanley said in a note on 24-11-2011 "The Sobha Developers share is trading at a 55% discount to NAV (Net Asset Value) 1.1 times FY 2011-12 expected price to book and 11 times FY2011-12 expected earnings. We estimate that there is nearly an 80% plus or "highly likely" probability for the scenario,"

The  Morgan Stanley said that the Sobha Developers  is on course to achieve its full-year target of 3-3.5 million square feet of new sales.

Review by Morgan Stanley

Intraday Tips For 29 November 2011 - Indian Real Estate shares

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Recommendations for 29 November 2011
Scrip
Trigger
Price
Stop Loss
Target 1
Target 2
DLF
BUY ABOVE
211.70
209.80
214.05
217.25
SELL BELOW
207.50
209.40
205.25
202.15
 
Top of Form

Scrip
Trigger
Price
Stop Loss
Target 1
Target 2
UNITECH
BUY ABOVE
24.35
24.15
24.65
25.00
SELL BELOW
23.90
24.10
23.60
23.25




Scrip
Trigger
Price
Stop Loss
Target 1
Target 2
IBREALEST
BUY ABOVE
67.20
66.60
67.90
68.95
SELL BELOW
65.85
66.45
65.15
64.15

Scrip
Trigger
Price
Stop Loss
Target 1
Target 2
HDFC
BUY ABOVE
87.20
86.40
88.15
89.45
SELL BELOW
85.45
86.25
84.50
83.25
HDFC
BUY ABOVE
653.15
647.25
660.30
670.25
SELL BELOW
640.20
645.95
633.15
623.65

Scrip
Trigger
Price
Stop Loss
Target 1
Target 2
ANANTRAJ
BUY ABOVE
46.95
46.50
47.45
48.15
SELL BELOW
46.00
46.40
45.50
44.80
 
Top of Form

Scrip
Trigger
Price
Stop Loss
Target 1
Target 2
SOBHA
BUY ABOVE
235.90
233.80
238.50
242.10
SELL BELOW
231.25
233.30
228.70
225.25




Scrip
Trigger
Price
Stop Loss
Target 1
Target 2
PHOENIXLTD
BUY ABOVE
198.05
196.25
200.20
203.20
SELL BELOW
194.10
195.85
191.95
189.10

Scrip
Trigger
Price
Stop Loss
Target 1
Target 2
ORBITCORP
BUY ABOVE
28.00
27.75
28.30
28.75
SELL BELOW
27.45
27.70
27.15
26.75

Scrip
Trigger
Price
Stop Loss
Target 1
Target 2
PARSVNATH
BUY ABOVE
36.10
35.75
36.45
37.00
SELL BELOW
35.35
35.70
34.95
34.45

Note :  It should not be taken as an assured recommendation to Buy or Sell a referenced security. The data given is for informative purpose only.

 Bottom of Form
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