Is cash withdrawal for property purchase a problem?
2 years ago
if we need to withdraw our tax paid savings to purchase a house from our bank. so is there be any income tax concerns in it ? e.g property is worth 50 laks and I need to withdraw around 8-9 lakhs cash
A.Dear Sir,
Property cannot be purchased by paying cash and it will create a problem in future. You may pay all the amounts by way of Bank transfer or through cheque otherwise you will get a problem at future date but there cannot be any problem instantly.
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Property cannot be purchased by paying cash and it will create a problem in future. You may pay all the amounts by way of Bank transfer or through cheque otherwise you will get a problem at future date but there cannot be any problem instantly.
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Ayantika Mondal @ Prime Legal
Responded 2 years ago
A.Hi,
The principal amount repaid throughout the financial year is deductible under section 80C of the Income Tax Act. This clause allows for a maximum deduction of Rs. 1,50,000. As a result, if you spent more than Rs.1,50,000 as the major component, you won't be able to claim any tax benefits on the remainder. Furthermore, the deduction for principal payments may only be claimed once the property has been completed.
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The principal amount repaid throughout the financial year is deductible under section 80C of the Income Tax Act. This clause allows for a maximum deduction of Rs. 1,50,000. As a result, if you spent more than Rs.1,50,000 as the major component, you won't be able to claim any tax benefits on the remainder. Furthermore, the deduction for principal payments may only be claimed once the property has been completed.
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A.Hi,
You can avail of deduction under section 80C of the Income Tax Act for the principal amount repaid during the financial year. The maximum deduction allowed under this section is of Rs. 1,50,000. So, if you have paid more than Rs.1,50,000 as the principal component, you will not be able to get any tax benefit for the remaining amount. To add on to that deduction for repayment of principal can be claimed only after the completion of construction of the property.
Thank you. Kindly rate the answer.
You can avail of deduction under section 80C of the Income Tax Act for the principal amount repaid during the financial year. The maximum deduction allowed under this section is of Rs. 1,50,000. So, if you have paid more than Rs.1,50,000 as the principal component, you will not be able to get any tax benefit for the remaining amount. To add on to that deduction for repayment of principal can be claimed only after the completion of construction of the property.
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A.It should be a problem as when the Income Tax department sends you a show cause or scrutiny letter you can show them them the receipts for all the transactions. But try to avoid any cash transaction if you cannot show the receipt and if the buyer is asking for cash and then tell him that now cash transactions days are over because if the IT sends you the letter you will have to respond and if you don't then you will be in trouble.
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