Post by morgan81 on Jul 29, 2011 7:08:56 GMT -5
In order to enable Housing Finance Companies (HFCs) to attract deposits from the general public, the government of Kerala has extended various fiscal incentives to the private banking institutions. For developing a Home in Kerala , a property owner is now flooded with a host of financial options that can be availed in the minimum time and with little paper work.
At present any public company formed and registered with the main objective of carrying on the business of long term finance for construction or purchase of houses for residential purposes is eligible for following benefits under the Income Tax Act provided that the company is for the time being approved by the Central Government for the purpose of clause (viii) of sub-section (1) of Section 36 of the Income Tax Act.
1.Interest received from deposits with the HFC along with interest/income received from other deposits mentioned in Section 80L is eligible for deduction from the income of the depositor up to Rs.10,000 for the purpose of computation of Income Tax.
2.An income Tax assessee is also entitled to 20 percent rebate from income tax for repayment of amount (not exceeding Rs.10,000) towards the loan taken from the HFC for purchase and construction of a house in a residential property, vide Section 88 of the Income Tax Act.
3.Deposits with HFCs or investments in bonds issued by the HFC from the income derived from property held under a trust formed wholly for charitable or religious purposes quality as an eligible mode of investment under Section 11(5) of the Income Tax Act.
4.Deposits made with HFC are exempt from Wealth Tax under Section 5(1) (XXVII) of the Wealth Tax
5.HFC can create a special reserve within an amount not exceeding 40 percent of the total income and such a reserve is admissible as a deduction for computing income chargeable to income tax under the head ‘Profits & Gains of Business or Profession’ vide Section 36(1) (viii) of the Income Tax Act.
At present any public company formed and registered with the main objective of carrying on the business of long term finance for construction or purchase of houses for residential purposes is eligible for following benefits under the Income Tax Act provided that the company is for the time being approved by the Central Government for the purpose of clause (viii) of sub-section (1) of Section 36 of the Income Tax Act.
1.Interest received from deposits with the HFC along with interest/income received from other deposits mentioned in Section 80L is eligible for deduction from the income of the depositor up to Rs.10,000 for the purpose of computation of Income Tax.
2.An income Tax assessee is also entitled to 20 percent rebate from income tax for repayment of amount (not exceeding Rs.10,000) towards the loan taken from the HFC for purchase and construction of a house in a residential property, vide Section 88 of the Income Tax Act.
3.Deposits with HFCs or investments in bonds issued by the HFC from the income derived from property held under a trust formed wholly for charitable or religious purposes quality as an eligible mode of investment under Section 11(5) of the Income Tax Act.
4.Deposits made with HFC are exempt from Wealth Tax under Section 5(1) (XXVII) of the Wealth Tax
5.HFC can create a special reserve within an amount not exceeding 40 percent of the total income and such a reserve is admissible as a deduction for computing income chargeable to income tax under the head ‘Profits & Gains of Business or Profession’ vide Section 36(1) (viii) of the Income Tax Act.