Expense for AC won’t get tax sop
QI sold a piece of land and want invest the sale proceeds in a new house under construction. Can the amount be used for fixtures like fans, AC, carpenter work, light fixture, etc? RAJIV
Hyderabad
A) The cost of new house for the purpose of Section 54F include not only cost of purchase of new house but also includes other necessary expenditure to make the house habitable. In order to allow deduction under Section 54/54F on the expenditure incurred by the assessee, it should relate to the new “house property” purchased by the assessee, for making the house habitable.
In the present case, you have incurred expenditure in the form of fans, lights and carpentry work for cupboards, etc which can be recognised as expenditure incurred to make the house habitable. In my opinion, expenditure incurred on air-conditioner, and other furniture and fixtures like sofa sets and interiors, will not qualify for deduction.
QI am a defence pensionee. Please advise me if I can get tax deduction on any of the following:
Savings account in the name of my granddaughter; PPF account on my grandson’s name; LIC premium for my son or daughter-in-law or grandchildren; NSC in the name of my grandchildren; healthcare insurance premium for my son, daughterin-law or grandchildren; school tuition fees of grandchildren. M.R. SHANMUGAM Chennai
A) No deduction is allowable for the opening of a savings bank account. Under Section 80C, the amount contributed in the PPF scheme by an individual for himself/herself , his/her spouse and any child of such individual is eligible for deduction. So the contribution for PPF in the account of grandson will not be eligible for deduction.
For life insurance premium, the amount paid by an individual, on his/her life or on life of his/her spouse or life of any child (including adult children and married daughter vide circular no.574 dated 22.8.90) will be eligible for deduction under Section 80 C. Thus the deduction is allowable on the amount paid on the life of son, but not for others. Deduction is allowable for NSC, if the money invested in your name only and others.
The deduction is allowable for health insurance premium for yourselves, your spouse or dependent children, or parents. So it is not allowed for the premium paid for daughter-in-law and grandchildren.
Any sum paid by the individual to any educational institution in India for full-time education of any two children of such individual is eligible for deduction under Section 80C. But this will be allowed for grandson.