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PERSONAL INCOME TAX IMPORTANCE OF OTHER LAWS IN TAX PLANNING HERE IS EXPLAINED HOW?

Income Tax - Direct Tax Code - DTC - By: - PARAS MEHRA - Dated:- 6-7-2015 Last Replied Date:- 20-6-2016 - Introduction Tax laws are getting complex day by day and also scope for simple tax planning is also getting narrower day by day. In this dynamic environment, knowledge of only tax laws will not help you to sustain the proper tax planning. Knowledge and better understanding of different laws is very much important. Like, if you are dealing with any capital gain case, then knowledge of Transfe .....

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called capital gain). He wants to save the tax so he invested the total funds into a house property and claims exemption on grounds of investment under section 54f of the income tax act, 1961. As per section 54f, individual and HUF can claim exemption from capital gain if the consideration from sale of asset is invested into a house property, however with an important condition that you should not own more than one residential house at the time of claiming exemption. At the time of claiming exem .....

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not? The affirmative answer Yes, there is an answer and that too is affirmative. This tax can be saved. Assessee can claim the exemption as well. Let us understand the tax planning: Assessee named is Abdul Rehman. He is a Muslim by religion. He owns two houses and this is the only hindrance to claim the exemption under section 54f. So if we can solve this problem, assessee would be able to claim the exemption and ultimately can save tax. To solve this problem, tax planner suggests assessee to g .....

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nvalid as per Transfer of Property Act, 1882. After listening to client, he said the following words: Look sir, first of all understand that you are Muslim and your transaction will be covered under Mohammedan Law. Under the Mohammedan law, essentials of the gift are declaration by donor(i.e. you) and acceptance by done (any family member) and possession must have been transferred from donor to donee (which is already a case as family members were staying in there for a long time) just to make a .....

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ed. So, assessee took the same contention before the authorities and these contentions are accepted and penalties were taken off. The Other side of the transaction There is another question which may be asked from this transaction is that the member who will receive the property may also be liable to tax under section 56 of the income tax act. The answer is no. Section 56 does not apply when any property is gifted to any relative, and hence income will not be held taxable in the hands of receive .....

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is a useful expression so far is India is concerned. India is not an Islamic state and hence Islamic law does not apply here. However, certain part of it still applies to Muslims in India; the portion of Islamic Civil Law, which relates to (i) Inheritance, (ii) Will, (iii) Gifts etc is applicable to Muslims in India. Let us first understand how transfer is affected under section 123 Transfer of Property Act, 1882; For the purpose of making a gift of immovable property, transfer must be affected .....

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ift by the done and delivery of possession. Further, this rule is unaffected by the provisions of section 123 of transfer of property act, 1882 stated above. This is made very clear by section 129 of the transfer of property act, 1882, which reads as follows: Saving of donations mortis causa (an act to take effect at the death of the donor by which he disposes of the whole or a part of his property) and Muhammadan Law - Nothing in this chapter relates to gifts of movable property made in contemp .....

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