House sold at a loss? You still have to declare it in ITR

By Chirag Nangia

I am a retiree with an income below Rs 5 lakh. Last year I sold a residential property that was purchased in 2015. There was no capital gain in the transaction as the value of the property had gone down. Should I file an ITR?
—Kamal Awasti
When filing a tax return, income from all sources must be disclosed, regardless of the amount, otherwise at the time of processing the return, the tax department may raise a question or make an adjustment due of a mismatch. You can report your retirement income and capital gains in the RTI 2, which is a simple form. You will be required to disclose the sale consideration, acquisition cost and capital gains resulting from the sale of the property.

I am applying for a student loan for my daughter from a non-bank finance company. Will I benefit from tax advantages on this loan?
—Arvind Gaur
Pursuant to Section 80E, any person who takes out a loan from any approved financial institution or charitable institution to pursue higher education, whether in India or abroad, may claim a deduction from the amount interest paid for a consecutive period of eight years, beginning on the tax year in which he began to pay the interest on the loan or until the tax year in which the interest is fully paid, whichever comes first. The student loan can be contracted for oneself, one’s spouse, one’s children or a student for whom you are the legal guardian.

I am joining a new job in Bangalore and will have to stay in rental for some time until I get office accommodation. How do I apply for HRA benefits?
—Harpreet Singh
In accordance with income tax provisions, the lesser of the following is permitted as an exemption with respect to the HRA (i) an amount equal to 40% of salary (50%, if the house is located Bombay, Kolkata, Delhi or Chennai) (ii) HRA received by the employee in respect of the period the rental accommodation is occupied by the employee during the previous year (iii) excess rent paid on 10% of salary. You must calculate the amount of exempt HRA based on the actual rent for the period the allowance is received.

The screenwriter is the director, Nangia Andersen India. Send your questions to [email protected]

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