Tax queries: Am I liable to pay tax on unsold flat after receiving the occupancy certificate?

I am a salaried employee. My total income from salary and interest is Rs 30 lakh. I want to donate Rs 4 lakh to a charitable trust to get admission for my son in a school run by the trust. Will I get a tax benefit? —Rohit Sai

If the charitable trust is registered with the income tax department and has obtained certificate under Section 80 G of the Income Tax Act, then your donation will be eligible for deduction. Donation of up to 10% of your gross total income being Rs 3 lakh will qualify for deduction under Section 80 G. You will get deduction of 50 % of the eligible amount being Rs 1.5 lakh. The employer will not consider this amount while determining your tax liability. You will have to file tax return and claim the deduction.

We are into real estate business. We have constructed a residential complex of two buildings having 100 flats. We have sold 80 flats and the rest are in stock as on March 15 and we don’t wish to sale as the market is sluggish. We received occupancy certificate in April 2015. Do we have to pay any tax on unsold flat ? —Sushil C

You will be required to compute the income under the head Income from house property for unsold flat for AY2018-19. New Section 23 (5) has been introduced which is effective from AY2018-19. In respect of unsold flats, the assessee can treat the rateable value of unsold flats at Nil for a period of one year from the end of the financial year in which the certificate of completion of the property is obtained . You have received the certificate of completion on April 2015 and hence you will be liable to compute the income for AY 2018-19. This is the notional income, which will be chargeable to tax.

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