Homeowners can claim tax benefits on pre-possession home loan interest within five years after construction ends. You get five equal annual instalments to use this deduction. For self-occupied homes, the interest limit is Rs 2 lakh yearly. Many taxpayers also asked about capital gains, options trading losses, and crypto taxes.
Learn about tax benefits on home loans for under-construction properties, capital gains tax on gifted property sales, tax offset on options trading losses, and cryptocurrency tax rates and rules in India.
l What is the maximum time limit to claim tax benefits on a home loan for an under-construction property?
-- Himanshu Nagar
Once construction is completed, the eligible pre-possession interest can be claimed in five equal annual instalments, beginning from the year in which construction is completed. For a self-occupied property, the aggregate deduction for interest on a qualifying home loan is capped at Rs 2 lakh per year. For a let-out property, the interest deduction is based on the actual interest and, the amount of resultant house-property loss can be set off against other heads of income up to Rs 2 lakh. The balance loss can be carried forward up to eight tax years but can only be set off against income from house property in the future.
l How should I calculate capital gains tax on a gifted property if I sell?
-- Aditya Ashish
The cost of acquisition in the case of a gifted property is taken as the cost to the previous owner. The cost of improvement incurred by the previous owner and the recipient, if any, can also be deducted in computing the gain. Further, the period for which the property was held by the previous owner is also included while determining the holding period of the property.
l I had incurred some losses in options trading a month ago. How can I tax offset the loss?
-- Harshit Airi
Income from futures and options (F&O) trading is treated as non-speculative business income. Consequently, profits are taxable under the head 'Profits and Gains of Business or Profession', and losses can be set off against any other business income, except salary income. Unabsorbed non-speculative business losses can be carried forward for up to eight assessment years and set off against future business income.
l I had invested in some crypto currency. What is the tax rate on gains after sale?
-- Akshay Sharma
Cryptocurrency is covered within the definition of a Virtual Digital Asset (VDA) and income arising from the transfer of a VDA is specifically taxed at 30%, plus applicable surcharge and health and education cess. No deduction is allowed for expenditure incurred in connection with the transfer. A loss from the transfer of one VDA cannot be set off against income from another VDA or against any other income. The transaction has to be reported in Schedule VDA of the ITR with complete details. In addition, 1% TDS applies on the consideration paid for transfer of a VDA.
The writer is senior partner, Nangia & Co LLP. Send your queries to fepersonalfinance@expressindia.com
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