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Old 21st July 2011, 12:34   #121
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For this AY (2011-12) there is a new form introduced , SAHAJ . I understand that all salaried individuals who do not have income from capital gains , agriculture etc need to use this form to file the returns .
In last AY, salaried individuals who have home loans where using ITR-2.
So basically for this AY , can the new SAHAJ form be used by individuals who has a home loan or still need to file in ITR-2?
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Old 21st July 2011, 14:40   #122
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I filed my returns in form 1. No crowds, no queues. I went in, was fiddling inside my bag to take out the returns form, and then started looking around to find who is the guy to hand this over to. The guy at the counter actually called me!!!! Was out in less and 240 seconds flat.

Had to visit the office twice - once to get the form and another to submit. Could have done with one visit if I was very sure of what to do. But I take my own sweet time, on such things and took more than six or seven days to fill it out. Actual filling process took less than 10 minutes though.

Yes - the form is available at the office free of cost. Dunno about specific offices / locations though.

Quite a few people were filling up their forms on the spot.

@bullboy - please read the instructions for filling up sahaj form - it available from the it department site (see previous page for the download link).

AFAICT, interest repayment on housing loan is part of 80C. Principal component of the loan repayment is set off against the notional income from house property. So, you end up with a "loss" against the head "income from house property". So, you end up showing a negative value in column B2 of sahaj form.

So, you certainly can use sahaj / ITR1.

Please note that (1) This is not tax advice, and I may be wrong; and (2) people having only one house can use ITR1.

Edit - came across this link just after closing the browser window. You can pick between (1) joining law school and becoming a lawyer (2) smile at the length to which people go to escape the long clutches of the tax man. (3) all of above.

http://economictimes.indiatimes.com/...ow/9306023.cms

Last edited by BaCkSeAtDrIVeR : 21st July 2011 at 14:46.
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Old 21st July 2011, 16:50   #123
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

Quote:
Originally Posted by bullboy View Post
For this AY (2011-12) there is a new form introduced , SAHAJ . I understand that all salaried individuals who do not have income from capital gains , agriculture etc need to use this form to file the returns .
In last AY, salaried individuals who have home loans where using ITR-2.
So basically for this AY , can the new SAHAJ form be used by individuals who has a home loan or still need to file in ITR-2?
SAHAJ form to be filled by people who have income only from salary and ONE house property. If you have more than one house property, you cannot use this form.

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Originally Posted by BaCkSeAtDrIVeR View Post
AFAICT, interest repayment on housing loan is part of 80C. Principal component of the loan repayment is set off against the notional income from house property. So, you end up with a "loss" against the head "income from house property". So, you end up showing a negative value in column B2 of sahaj form.
Its the other way round. Principal component comes under section 80C whereas home loan interest is taken as (negative) income from house property.

Rohan
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Old 21st July 2011, 16:53   #124
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SAHAJ form to be filled by people who have income only from salary and ONE house property. If you have more than one house property, you cannot use this form.
I have only one salary and one home
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Old 21st July 2011, 17:41   #125
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Originally Posted by rohan_iitr View Post
Its the other way round. Principal component comes under section 80C whereas home loan interest is taken as (negative) income from house property.

Thanks for pointing that out.

I am actually researching taking a housing loan - not that I need a house. The evil plan is to buy a flat at some other place other than where I live, and let it out.

Say, I take a loan of 15lakh, and repay, say, 1.8 lakh a month, the loan is not EMI based, and outgo in first year is 1.6L towards interest and 20K towards capital. In the final year (of approx 22 year tenure), the ratio will be reversed - I will pay 20K towards interest and 1.6L towards capital.

Assuming that tax laws do not change, and rental income stays at, say, 1.2 lakh per month, In the first year, my "loss from house property" is (1.2lakh rent minus 1.6L interest) = 40K.

In the last year, this becomes 1.2 lakh rent less 20K interest, so my income from house property is 1Lakh??

Did I get the math correct?

Last edited by BaCkSeAtDrIVeR : 21st July 2011 at 17:44.
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Old 22nd July 2011, 09:47   #126
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Originally Posted by BaCkSeAtDrIVeR View Post
Say, I take a loan of 15lakh, and repay, say, 1.8 lakh a month, the loan is not EMI based, and outgo in first year is 1.6L towards interest and 20K towards capital. In the final year (of approx 22 year tenure), the ratio will be reversed - I will pay 20K towards interest and 1.6L towards capital.

Did I get the math correct?
I am lost here. Loan not on EMI based option, how does it work ? Wondering though. Sorry to be a bit OT.
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Old 22nd July 2011, 14:57   #127
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Here is how I understand things. Suppose I have 4 Lakh income. 1lakh is 80C, so I pay taxes on 3 lakh. When I take a housing loan, (1) my current contributions towards 80C will have to be reduced. (2) capital repayment of the loan is admissible 80C deduction, and (3) interest repayment is set off against rent (actual or deemed - but if house is occupied by me, only 1.5lakh can be set off).

So, here is how it goes for a rented house.

1. My salary = 4 l
2. Rent income = 1.2Lakh
3. interest component of repayment is 1.6 lakh for first year; so my "income from house" is actually a loss of 40K

4. My net income is 4 lakh (less) 1lakh (80C investment) less 40k (loss from house) = 2.6lakh.

I need to pay tax on 2.6 lakh.

Quote:
Originally Posted by lambuhere1 View Post
I am lost here. Loan not on EMI based option, how does it work ? Wondering though. Sorry to be a bit OT.
EMI makes no difference - you still have to get a certificate from the bank showing split up of interest / capital.

See below

Year > Loan amt > Int @10.5% > repayment > balance
1 > 15.5L > 1,62,759 > 1,80,000 > 15,32,765
2 > 1532765 > 160938 > 180000 > 1513688
3 > 1513688 > 158937 > 180000 > 1492626

Note the trend - interest reduced; so, as each year passes, proportion of amount I repay towards capital increases.

As we go on, in each year, interest component reduces, reducing the "loss" I can set off against rent. If I am insane and have not hiked the rent, by year 15, interest is equal to or less than 1.2 lakh, Now, I no longer have a "loss" from house property.

So, I have to pay (1) interest, (2) repay capital on housing loan (3) income tax on rent too.

In reality, by the 8th year, (considering change in income, rent, possible changes in interest rates, etc) the housing loan is tax neutral.

In other words, it makes no sense to buy a house for availing housing loan benefits.

OTOH, for own occupation, since we look at 'deemed rental value' which would be notional, (12 times the property tax paid to municipality / corporation is a reasonable annual rental value), we get higher "loss".

Can somebody please show me if I am wrong in my conclusion?
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Old 22nd July 2011, 16:11   #128
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@ bullboy - If you have only salary income and one house property, you can use SAHAJ form.

@ BaCkSeAtDrIVeR - Your math is correct.

But if you take my advice, if you are planning to buy a house only so that you can claim some income tax relief, you would be disappointed.

As you mentioned, you plan to purchase a house on loan and then rent it out. Also, the rent received would be in the range of 1-1.5L. Home loan repayment (interest plus principal) per year would also be a similar amount. So your income from house property (rent received - interest paid) will not be a significant amount and hence you would not get any significant income tax relief by going though all this.

Income Tax relief is more significant for self-occupied property because there is no rent received and the home loan repayment (negative income from house property) gets you a significant income tax relief.

If you want to buy a property for investment purpose, then its a separate thing. But don't buy a house just thinking about the IT benefits.

Rohan

Last edited by rohan_iitr : 22nd July 2011 at 16:15.
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Old 29th July 2011, 16:28   #129
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rohan, thanks. Exactly the info I was looking for. I am aware of the capital appreciation part of transaction. Was looking exclusively for info on tax impact.
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Old 1st August 2011, 09:41   #130
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Latest complaint about the IT department's efiling process is that they are asking for your private key.

That is akin to a online e-commerce site asking for the username and pasword to your online banking account.
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Old 1st August 2011, 09:44   #131
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

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Latest complaint about the IT department's efiling process is that they are asking for your private key.

That is akin to a online e-commerce site asking for the username and pasword to your online banking account.
What private key are they asking for? I did the online filing for both my wife as well as myself for the Declaration year, and had no issues at all.

Now i need to post the respective ITR Vs.
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Old 1st August 2011, 11:53   #132
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What private key are they asking for? I did the online filing for both my wife as well as myself for the Declaration year, and had no issues at all.

Now i need to post the respective ITR Vs.

The part in bold means you did not use a digital signature.

I was referring to situations where e-filing is made using digital signatures. In such situations, you need not send a separate signed acknowledgement. You make a signature using your private key. If you give out the private key, anybody can claim to be you and generate your signature and attach it to any document.

The news I heard is that the e-filing (using digital signatures) site is asking for your private key / info from the USB dongle which contains the private key). Huh???? Can any body verify this?
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Old 1st August 2011, 12:19   #133
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

Folks,

This is my last year refund status, please explain what this means:
Adjusted against outstanding demand. (CIN-BSR code 00**329 Challan deposit date - 060***11 Challan Sequence no - 02**4)

I have to receive so much money because of showing proofs late

Thanks,
Vinod
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Old 1st August 2011, 13:12   #134
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Default Re: All Income Tax Queries (refunds, disputes, rates etc...)

Guys, filing returns online is indeed easier and even refunds are quicker.
For Fy2009-10, i filed return on 31.03.2011 through Tax Spanner and then mailed the ITR-V in late april.
Last month I already got the refund cheque.
For Fy2010-11(Ay2011-12), have filed returns through www.incometaxindiaefiling.gov.in and it was so easy, I was wondering why did I pay 150/- bucks to Tax Spanner for last years tax returns.
Have mailed the ITR-V already to the IT department, now waiting for the refund. Infact for Fy2008-9, I went to the ITO personally and submitted my returns and my refund is still in process.
So file online guys, it is so much easier and quicker.
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Old 1st August 2011, 13:17   #135
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Quote:
Originally Posted by BaCkSeAtDrIVeR View Post
The part in bold means you did not use a digital signature.

The news I heard is that the e-filing (using digital signatures) site is asking for your private key / info from the USB dongle which contains the private key). Huh???? Can any body verify this?
AFAIK e-filling expects you to upload your public key! This is standard way of testing the the signed documents. USB token contains both private as well as public keys. Here only public key is required to be updated.
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