to get the registration done in his favor even after the passage ofloo days and the advance money ofRs 10 Iakh was forfeited as per the terms of sale agreement. Is the forfeited advance money taxable? H yes, on what amoont? H the forfeited advance money is not taxable, then how should it be entered in the books of accoonts?
- Mukesh Jain, e-mail Forfeited advance money is recorded in the books of accounts as per the explanation given below: Where any capital asset was the subject of negotiations for its transfer on any previous occasion, any advance or other money received and retained by the assessee for such negotiations is to be deducted from the cost for which the asset was acquired or from the writtendown value or the fair market value, as the case may be, in computing the cost of acquisition. Only when the advance or other money has been received or retained or forfeited by the assessee can it be deducted from the cost of the asset.
In the given case, the cost of purchase of capital asset, i.e., house property, is Rs 5
lakh and forfeited advance money received was Rs 10 lakh. Therefore, you cannot deduct the indexed cost of acquisition. The entire amount of sale consideration will be taxable as long-term capital gain.
Can I claim deductions on medical expenses in Form -16 even though my employer did not provide medical allowance or reimbursement?
- Mukesh Kumar, e-mail Deduction on medical treatment (Section 80DDB of the Income Tax (IT) Act, 1961) is available if the following conditions are satisfied:
• The taxpayer is resident in India (ordinary resident and non-ordinary resident). • The tax payer is an individual or Hindu undivided family (HUF).
• The taxpayer has actually paid any amount for the medical treatment of a specified disease or ailment as prescribed by the Central Board of Direct Tax under Rule I1DD of the IT Rules 1962.
• The expenditure is actually incurred for medical treatment of the assessee himself or wholly/mainly dependent husband/wife, children, parents, brothers and sisters of the tax payer.
For HUF, the medical expenses should have been incurred for the medical treatment of any member of the family who is wholly/ mainly dependent upon the family.
• The assessee has to submit a certificate in the prescribed form (Form No. 10 -1) from a neurologist, an oncologist, a urologist, a hematologist, an immunologist or such other specialist, as may be prescribed, working in a government hospital.
Deduction of Rs 40000 or expenditure actually incurred, whichever is lower, is
- Mukesh Jain, e-mail Forfeited advance money is recorded in the books of accounts as per the explanation given below: Where any capital asset was the subject of negotiations for its transfer on any previous occasion, any advance or other money received and retained by the assessee for such negotiations is to be deducted from the cost for which the asset was acquired or from the writtendown value or the fair market value, as the case may be, in computing the cost of acquisition. Only when the advance or other money has been received or retained or forfeited by the assessee can it be deducted from the cost of the asset.
In the given case, the cost of purchase of capital asset, i.e., house property, is Rs 5
lakh and forfeited advance money received was Rs 10 lakh. Therefore, you cannot deduct the indexed cost of acquisition. The entire amount of sale consideration will be taxable as long-term capital gain.
Can I claim deductions on medical expenses in Form -16 even though my employer did not provide medical allowance or reimbursement?
- Mukesh Kumar, e-mail Deduction on medical treatment (Section 80DDB of the Income Tax (IT) Act, 1961) is available if the following conditions are satisfied:
• The taxpayer is resident in India (ordinary resident and non-ordinary resident). • The tax payer is an individual or Hindu undivided family (HUF).
• The taxpayer has actually paid any amount for the medical treatment of a specified disease or ailment as prescribed by the Central Board of Direct Tax under Rule I1DD of the IT Rules 1962.
• The expenditure is actually incurred for medical treatment of the assessee himself or wholly/mainly dependent husband/wife, children, parents, brothers and sisters of the tax payer.
For HUF, the medical expenses should have been incurred for the medical treatment of any member of the family who is wholly/ mainly dependent upon the family.
• The assessee has to submit a certificate in the prescribed form (Form No. 10 -1) from a neurologist, an oncologist, a urologist, a hematologist, an immunologist or such other specialist, as may be prescribed, working in a government hospital.
Deduction of Rs 40000 or expenditure actually incurred, whichever is lower, is
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