Income under the House Properties

Basis of Charge [Section 22]:

Income from house property shall be taxable under this head if following conditions are satisfied:

a) The house property should consist of any building or land appurtenant thereto;

b) The taxpayer should be the owner of the property;

c) The house property should not be used for the purpose of business or profession carried on by the taxpayer.

Computation of income from house property:

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Income from a house property shall be determined in the following manner:

Particulars	Amount
Gross Annual Value	-
Less: Municipal Taxes	-
Net Annual Value	****
Less: Standard deduction at 30% [Section 24(a)]	-
Less: Interest on borrowed capital [Section 24(b)]	-
Income from house property	****

Gross Annual value [Sec. 23(1)]

The Gross Annual Value of the house property shall be higher of following:

a) Expected rent, i.e., the sum for which the property might reasonably be expected to be let out from year to year. Expected rent shall be higher of municipal valuation or fair rent of the property, subject to maximum of standard rent;

b) Rent actually received or receivable after excluding unrealized rent but before deducting loss due to vacancy

Out of sum computed above, any loss incurred due to vacancy in the house property shall be deducted and the remaining sum so computed shall be deemed to the gross annual value.

Deductions:

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Description	Nature of Deductions
Municipal Taxes	Municipal taxes including service-taxes levied by any local authority in respect of house property is allowed as deduction, if: a) Taxes are borne by the owner; and b) Taxes are actually paid by him during the year.
Standard Deduction[Section 24(a)]	30% of net annual value of the house property is allowed as deduction if property is let-out during the previous year.
Interest on Borrowed Capital * [Section 24(b)]	a) In respect of let-out property, actual interest incurred on capital borrowed for the purpose of acquisition, construction, repairing, re-construction shall be allowed as deduction
	b) In respect of self-occupied residential house property, interest incurred on capital borrowed for the purpose of acquisition or construction of house property shall be allowed as deduction up to Rs. 2 lakhs. The deduction shall be allowed if capital is borrowed on or after 01-04-1999 and acquisition or construction of house property is completed within 5 years.
	c) In respect of self-occupied residential house property, interest incurred on capital borrowed for the purpose of reconstruction, repairs or renewals of a house property shall be allowed as deduction up to Rs. 30,000.

Note: With effect from Assessment Year 2020-21, deduction for interest paid or payable on borrowed capital shall be allowed in respect of two self-occupied house properties. However, the aggregate amount of deduction under this provision shall remain same i.e., Rs. 30,000 or Rs. 2,00,000, as the case may be.

* Any interest pertaining to the period prior to the year of acquisition/ construction of the house property shall be allowed as deduction in five equal installments, beginning with the year in which the property was acquired/ constructed.

* Deduction for interest on borrowed capital shall be limited to Rs. 30,000 in following circumstances:

a) If capital is borrowed before 01-04-1999 for the purpose of purchase or construction of a house property;

b) If capital is borrowed on or after 01-04-1999 for the purpose of re-construction, repairs or renewals of a house property;

c) If capital is borrowed on or after 01-04-1999 but construction of house property is not completed within five years from end of the previous year in which capital was borrowed.

Deduction for interest on housing loan [Section 80EE]

Deduction of up to Rs 50,000 shall be allowed to an Individual for interest payable on loan taken for the purpose of acquisition of a house property subject to following conditions:

 a)  Loan has been sanctioned by Financial institution during the financial year 2016-17;

 b)  The amount of loan sanctioned does not exceed Rs 35,00,000;

 c)  The value of residential property does not exceed Rs 50,00,000;

 d)  The assessee does not own any residential house property on the date of sanction of loan;

 e)  Where deduction has been allowed under this section, no deduction shall be allowed in respect of such interest under any other provision.

Computation of Income from House Property
S. No.	Property Type	Gross Annual Value of the property	Deduction for municipal taxes	Net Annual Value of the property	Standard Deduction	Interest on borrowed capital
1.	Two self-occupied house property	Nil	Nil	Nil	Nil	Deduction for interest on borrowed capital is allowed up to Rs. 30,000 or Rs. 2,00,000, as the case may be.
2.	House property could not be occupied by the owner due to employment or business carried on at any other place	Nil	Nil	Nil	Nil	Deduction for interest on borrowed capital is allowed up to Rs. 30,000 or Rs. 2,00,000, as the case may be.
3.	Let out property	To be computed as per provisions of Section 23(1)	Allowed on actual payment basis	Gross annual value less Municipal taxes	30% of Net Annual Value	Entire amount of interest paid or payable on borrowed capital shall be allowed as deduction. Pre-construction interest shall be allowed as deduction in 5 annual equal installments (Subject to certain conditions).
4.	More than two-self occupied properties	Only two properties selected by the taxpayer will be considered as self-occupied house properties and all other properties shall be deemed to be let-out for the purpose of computation of income under the head house property.
5.	A self-occupied property let-out for the part of the year	The house will be taken as let-out property and no concession shall be available for the duration during which the property was self-occupied.
6.	One part of the property is let-out and other part is used for self-occupied purposes	Each part of the property shall be considered as separate property and income will be computed accordingly

Composite Rent

If letting out of building along with movable assets i.e., machinery, plan, furniture or fixtures, etc. forms part of a single transaction and are inseparable, the composite rent shall be taxable under the head “Profits and gains from business or profession” or “Income from other sources”, as the case may be. On the other hand, if the letting out of building is separable from letting of other assets, then income from letting out of building shall be taxable under the head “Income from house property” and income from letting out of other assets shall be taxable under the head “Profits and gains from business or profession” or “Income from other sources”, as the case may be.

Treatment of unrealized rent and arrears of rent [Explanation to section 23(1)]

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Deduction for unrealized rent:

Unrealized rent is that portion of rental income which the owner could not realize from the tenant. Unrealized rent is allowed to be deducted from actual rent received or receivable only if the following conditions are satisfied:

a) The tenancy is bona fide;

b) The defaulting tenant has vacated, or steps have been taken to compel him to vacate the property;

c) The defaulting tenant is not in occupation of any other property of the assessee;

d) The taxpayer has taken all reasonable steps to institute legal proceedings for the recovery of the unpaid rent or satisfies the Assessing Officer that legal proceedings would be useless.

Arrears of rent or recovery of unrealized rent [Section 25A]

Amount received in respect of arrears of rent or any subsequent recovery of unrealized rent shall be deemed to be the income of taxpayer under the head "Income from house property" in the year in which such rent is realized or received (whether or not the assessee is the owner of that property in that year).

Further, 30% of such rent shall be allowed as deduction.

Co-owner and Deemed Owner

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Property owned by co-owners [Section 26]:

If house property is owned by co-owners and their share in house property is definite and ascertainable than the income of such house property will be assessed in the hands of each co-owner separately. For the purpose of computing income from house property, the annual value of the property will be taken in proportion to their share in the property. In such a case, each co-owner shall be entitled to claim benefit of self-occupied house property in respect of their share in the property (subject to prescribed conditions). However, where the shares of co-owners are not definite, the income of the property shall be assessed as that of an Association of persons.

Deemed owner [Section 27]:

Income from house property is taxable in the hands of its owner. However, in the following cases, legal owner is not considered as the real owner of the property and someone else is considered as the deemed owner of the property to pay tax on income earned from such house property:

1. The holder of an impartible estate shall be deemed to be the individual owner of all the properties comprised in the estate;

2. A member of a co-operative society, company or other association of persons to whom a building or part thereof is allotted or leased under a house building scheme shall be deemed to be the owner of that building or part thereof;

3. A person who is allowed to take or retain possession of any building or part thereof in part performance of a contract of the nature referred to in Section 53A of the Transfer of Property Act, 1882 shall be deemed to be the owner of that building or part thereof;

4. A person who acquires any rights (excluding any rights by way of a lease from month to month or for a period not exceeding one year) in or with respect to any building or part thereof, by virtue of any such transaction as is referred to in section 269UA(f), shall be deemed to be the owner of that building or part thereof.

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Tax Free Income under section-10 of Income tax

Allowance/perquisites to Government employee outside India [Section 10(7)]

 As per section 10(7), any allowances or perquisites paid or allowed as such outside India by the Government to a citizen of India for rendering service outside India is exempt from tax.

Income of foreign Government employee under co-operative technical assistance programmer [Section 10(8)]

 As per section 10(8), remuneration received directly or indirectly by an individual, from the foreign Government in connection with a co-operative technical assistance programmer and projects in accordance with an agreement entered into by the Central Government and such foreign Government, is exempt from tax. Further, exemption is available in respect of any other income of such an individual which accrues or arises outside India and is not deemed to accrue or arise in India, provided such individual is required to pay income-tax/ social security tax to the foreign Government.

 Remuneration or fees received by a non-resident consultant/its foreign employees [Section 10(8A), (8B)]

 Under section 10(8A), (a) remuneration or fees received by a consultant* directly or indirectly out of the funds made available to an international organisation, under a technical assistance agreement between such organisation and the Government of a foreign State and (b) any other income which accrues or arises to him outside India and is not deemed to accrue or arise in India, in respect of which such consultant is required to pay income-tax/social security tax to the foreign Government of the country of his origin, is exempt from tax.

*Consultant means any individual who is either not a citizen of India, or being a citizen of India, is not ordinarily resident in India or any other person who is a non-resident and is engaged by the international organization for rendering technical services in India in accordance with an agreement entered into by the Central Government and the said international organization and the agreement relating to engagement of consultant is approved by the prescribed authority.

 Section 10(8B) grants similar exemption to the employee of the above discussed consultant, if such employee is either not a citizen of India or being a citizen of India, is not ordinarily resident in India and the contract of his service is approved by prescribed authority before the commencement of his service.

 Income of a family member of an employee serving under co-operative technical assistance programme [Section 10(9)]

 As per section 10(9), the income of any member of the family of any such individual as is referred to in section 10(8)/(8A)/(8B) accompanying him to India, which accrues or arises outside India and is not deemed to accrue or arise in India, in respect of which such member is required to pay any income or social security tax to the Government of that foreign State or country of origin of such member, as the case may be, is exempt from tax.

Death-cum-retirement gratuity received by Government servants [Section 10(10)(i)]

Section 10(10)(i) grants exemption to gratuity received by Government employee (i.e., Central Government or State Government or local authority).

Gratuity received by a non-Government employee covered by Payment of Gratuity Act, 1972 [Section 10(10)(ii)]

As per section 10(10)(ii), exemption in respect of gratuity in case of employees covered by the Payment of Gratuity Act, 1972 will be lower of following :  

15 days’ salary × years of service.

Maximum amount specified, i.e., Rs. 20,00,000*.

 Gratuity actually received.

* Limit increased from Rs. 10 lakhs to Rs. 20 lakhs vide Notification No. 1420(E), dated 29-3- 2018. Note:

1) Instead of 15 days’ salary, only 7 days salary will be taken into consideration in case of employees of seasonal establishment.

2) 15 days’ salary = Salary last drawn × 15/26

3) Salary for this purpose will include basic salary and dearness allowance only. Items other than basic salary and dearness allowance are not to be considered.

4) In case of piece rated employee, 15 days’ salary will be computed on the basis of average of total wages (excluding overtime wages) received for a period of three months immediately preceding the termination of his service.

5) Part of the year, in excess of 6 months, shall be taken as one full year.

Gratuity received by a non-Government employee not covered by Payment of Gratuity Act, 1972 [Section 10(10)(iii)]

As per section 10(10)(iii), exemption in respect of gratuity in case of employees not covered by the Payment of Gratuity Act, 1972 will be lower of following :  

Half month’s salary for each completed year of service, i.e.,

· [Average monthly salary × ½] × Completed years of service.

  Rs. 10,00,000.

Gratuity actually received.

Note:

1) Average monthly salary is to be computed on the basis of average of salary for 10 months immediately preceding the month of retirement.

 2) Salary for this purpose will include basic salary, dearness allowance, if the terms of service so provide and commission based on fixed percentage of turnover achieved by the employee.

3) While computing years of service, any fraction of a year is to be ignored.

Pension [Section 10(10A)]:

As per section 10(10A), any commuted pension, i.e., accumulated pension in lieu of monthly pension received by a Government employee is fully exempt from tax. Exemption is available only in respect of commuted pension and not in respect of un-commuted, i.e., monthly pension. Exemption in respect of commuted pension in case of a non-Government employee will be as follows:

·  If the employee receives gratuity, one third of full value of commuted pension will be exempt from tax under section 10(10A).

·If the employee does not receive gratuity, one half of full value of commuted pension will be exempt from tax under section 10(10A).

Leave salary [Section 10(10AA)]

As per section 10(10AA), leave encasement by a Government employee at the time of retirement (whether on superannuation or otherwise) is exempt from tax. In the hands of non-Government employee exemption will be least of the following:

 1. Period of earned leave standing to the credit in the employee’s account at the time of retirement (*) × Average monthly salary ($).

 2. Average monthly salary ($) × 10 (i.e., 10 months’ average salary).

3. Maximum amount as specified by the Government, i.e., Rs. 3,00,000.

4. Leave encasement actually received at the time of retirement.

(*)Leave credit to the account of the employee at the time of retirement should be restricted to 30 days per year of service if leave entitlement as per service rules exceeds 30 days per year of actual service.

($) Salary for the above purpose means average salary drawn in the past ten months immediately preceding the retirement (i.e., preceding the day of retirement) and will include basic salary, dearness allowance (if considered for computing all the retirement benefits) and commission based on fixed percentage of turnover achieved by the employee.

Apart from the above items, salary for this purpose does not include any other allowances or perquisites.

Retrenchment compensation [Section 10(10B)]

As per section 10(10B), compensation received at the time of retrenchment is exempt from tax to the extent of lower of the following:

(a) An amount calculated in accordance with the provisions of section 25F(b) of the Industrial Dispute Act, 1947; or

(b) Maximum amount specified by the Central Government (Rs. 5,00,000);

(c) Actual amount received.

 Under the Industrial Dispute Act, a workman is entitled to retrenchment compensation, equal to 15 days’ average pay for each completed year of continuous service or any part in excess of six months.

Compensation in excess of aforesaid limits is taxable as salary. However, the aforesaid limit is not applicable in cases where compensation is paid under any scheme approved by the Central Government.

Compensation on account of any disaster [Section 10(10BC)]

 Any amount received from the Central Government or State Government or a Local Authority by an individual or his legal heirs as compensation on account of any disaster is exempt from tax. However, no deduction is available in respect of the amount received or receivable to the extent such individual or his legal heirs has been allowed a deduction under the Act on account of loss or damage caused due to such disaster. Disaster here means any disaster due to any natural or man-made causes or by accident/negligence which results in substantial loss of human life or damage to property or environment and the magnitude of such disaster is beyond coping capacity of community of the affected area.

Payment at the time of voluntary retirement [Section 10(10C)]

As per section 10(10C), any compensation received at the time of voluntary retirement or termination of service is exempt from tax, if the following conditions are satisfied:  

·Compensation is received at the time of voluntary retirement or termination (or in the case of an employee of public sector Company, at the time of voluntary separation).

· Compensation is received by an employee of following undertakings

a) public sector company ; or

 b) any other company ; or

c) an authority established under a Central, State or Provincial Act ; or

d) a local authority ; or

e) a co-operative society ; or

f) a University established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a University under section 3 of the University Grants Commission Act, 1956 (3 of 1956) ; or

 g) an Indian Institute of Technology within the meaning of clause (g) of section 3 of the Institutes of Technology Act, 1961 (59 of 1961) ; or

 h) any State Government; or

i) the Central Government; or

 j) Notified institutes having importance throughout India or in any State or States,

 k) Notified institute of management  

·Compensation is received in accordance with the scheme of voluntary retirement/separation, which is framed in accordance with guidelines prescribed under Rule 2BA of Income-tax Rules, 1962*.  

·Maximum amount of exemption is Rs. 5,00,000.

·  Where exemption is allowed to an employee under section 10(10C) for any assessment  year, no exemption under this section shall be allowed to him for any other assessment year.  

·With effect from assessment year 2010-11, section 10(10C) has been amended to provide that where any relief has been allowed to an assessee under section 89 for any assessment [As amended by Finance (No. 2) Act, 2019] year in respect of any amount received or receivable on his voluntary retirement or termination of service or voluntary separation, no exemption under section 10(10C) shall be allowed to him in relation to such or any other assessment year.

*Guidelines prescribed under Rule 2BA of Income-tax Rules. 1962

Voluntary retirement scheme should be framed in accordance with the following guidelines:

i.                     it should apply to an employee who has completed 10 years of service or completed 40 years of age. This requirement would not be in case of amount received by an employee of a public sector company under the scheme of voluntary separation framed by such public sector company.

ii.                    it should apply to all employees (by whatever name called) including workers and executives of a company or of an authority or of a co-operative society, as the case may be, excepting directors of a company or of a co-operative society;]

iii.                  The scheme of voluntary retirement or voluntary separation should be drawn to result in overall reduction in the existing strength of the employees;

iv.                 The vacancy caused by the voluntary retirement or voluntary separation is not to be filled up;

v.                   The retiring employee of a company shall not be employed in another company or concern belonging to the same management

vi.                 The amount receivable on account of voluntary retirement or voluntary separation of the employee does not exceed the amount equivalent to –

-3 months salary* for each completed year of service or

- salary at the time of retirement multiplied by the balance months of service left before the date of his retirement

*Salary for this purpose will include basic salary, dearness allowance, if the terms of service so provide and commission based on fixed percentage of turnover achieved by the employee.

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Gift Tax In India

The Indian Culture has thousands of years of history as well as various traditions attached to it. It is also a birth place of many religions like Hinduism, Sikhism, Buddhism etc. Besides, India is a country with diversified culture where each occasion is a reason to celebrate and show love and affection to close family members and friends. Gifts are exchanged on numerous occasions like Diwali, Raksha Bandhan, Christmas, New Year etc. In addition to this, some people also consider Gifting as a status symbol. But little did you know that these gifts are taxable after a certain limit and one needs to pay income tax on gifts received by them. It was introduced with an objective to impose tax on receiving and giving gifts under certain specific circumstances. It is important to know taxation involved with regards to gifts in India in order to avoid any further unplanned tax outflow.

Tax was levied on gifts in the hands of the person who receives it by enacting the Gift Act, 1958. However, it was later abolished in the year 1988. And six years later it was re-introduced under section 56(2) (V) of the Income-tax Act, 1961, for taxing gifts in the hands of the recipient. So, as per the law amended in the year 2017, ‘‘gifts received by any person are taxed in the hands of recipient under the head ‘Income from other sources’ at normal tax rates”.

While the Income Tax Act permits you to receive genuine gifts, there are set of rules regarding “gift tax in India”. A detailed understanding of the rules on this will help you in answering the queries from the tax department, in case your IT return is taken up for scrutiny.

Any exceptions?

Gifts up to Rs 50,000 per annum are exempt from tax in India. In addition, gifts from specific relatives like parents, spouse and siblings are also exempt from tax. Gifts in other cases are taxable. Tax on gifts in India falls under the purview of the Income Tax Act as there is no specific gift tax after the Gift Tax Act, 1958 was repealed in 1998.

Are gifts in cash and kind, both taxable?

Yes, all kinds of gifts including cash, gold, real estate, paintings or any other valuable item are taxable. However if the cash amount or value of the gift in kind is less than Rs 50,000 the same would not be taxable.

New Change in the budget 2019

With the passing of the Finance Bill 2019 in Parliament, some changes have been made in the rule regarding the taxation of gifts given by resident individuals to non-resident Indians (NRIs). 

According to changes made at the time of passing Budget 2019, only money paid by a resident individual to a 'person outside India without any consideration will be considered as taxable in the hands of the receiver'. 

Gift Tax Exemptions

As rules laid by the Government there are certain gifts that do not attract tax as and when received by any person in the form of Gift.

Note: Donee Meaning – A person who receives a gift is known as donee.

CATEGORY OF DONE (RECIPIENT OF GIFT)	CATEGORY OF DONOR	OCCASION COVERED
Individual A gift from relative is not taxable for a donee, but income from such gifts may be taxable in some cases For Instance: deemed owner concept in house property or clubbing provisions etc.	Relative Family members like your spouse, brother, sister of self and spouse, parents or parents in law or descendant of self or spouse are mentioned here	NA
Individual	Any person	Marriage of an Individual
Any person	Any person	Under a will or by way of inheritance
Any person	Individual	In contemplation of death of donor or payer
Any person	Local authority – Panchayat, Municipality, Municipal Committee and District Board, Cantonment Board	NA
Any person	Any fund, foundation or university and other educational institution. Or someone from medical institution or any trust or institution referred in Section 10(23C)	NA
Any person	Any religious or charitable trust under section 12A or section 12AA	NA
Any trust, university, fund, educational institution which is established for charitable/religious/educational /philanthropic purpose and approved by prescribed authority [Refer Section 10(23C) (iv) (v) (vi) and (via)]	Any person	NA
Members of HUF	HUF	Any distribution of capital assets on total or partial partition of a HUF
Trust created or established solely for the benefit of relative of the Individual	Individual	NA

Disclaimer:

There is excessive tax planning in India using gifts which apparently fall under the scrutiny of the tax department, especially if it’s in huge quantity. Therefore, it is important to maintain documents to establish the genuineness of gift received.

Section-80CCF and Section 80CCG

Section 80CCF of the Income Tax Act is a special provision introduced for benefiting the investors of certain government-approved bonds schemes. The section was discontinued w.e.f AY 2013-2014. Section 80CCF was formulated in the year 2010 and came in force in 2011 under the income tax act.The deduction is avaliable to Indian resident,Individuals, HUFs and Minors also shall be take the benefit for this deduction. The minimum investment must be Rs 5,000. The is no higher cap limit, however the deduction limits to Rs 20000. The bonds must have a 5 year lock-in period. Sometimes companies offer buyback options wherein the investor can surrender the bonds after 5 years without up giving up his interest income. These bonds are listed on the stock exchange

T

      These bonds are issued by infrastructure companies seeking approval of the government, and they offer a decent rate of interest plus additional tax benefits.Corporations like the Life Insurance Corporation, Integrated Infrastructure Finance Company, Industrial Financial Corporation of India, and non-banking financial institutions which are approved by the government as infrastructure companies.The benefits of Section 80CCF are over and above that of Section 80C.

Investors should remember that Section 80CCF applies only to certain investments.

Let us consider an example for better understanding

Mr Sunil, aged 30, works in a company, has earned a salary of Rs 7.5 lakhs this year. As per the income tax slabs, he is liable to pay tax on the amount exceeding Rs 2.5 lakhs, i.e. on Rs 4 lakhs. In order to reduce his tax liability, he invests Rs 100000 in schemes eligible for the deduction of section 80C. The limit of section 80C is Rs 1.5 lakh

Thus, now his taxable income at Rs 4 lakhs minus Rs 1 lakh = Rs 3 lakhs

Further, he also invests in government approved infrastructure bonds worth Rs 30,000.

Such bonds being eligible for deduction u/s 80CCF reduces his taxable income to Rs 3 lakhs minus Rs 20,000 = Rs 2.8 lakhs as the deduction u/s 80CCF is up to Rs 20,000.

Thus, we can see that Mr sunil has reduced his tax liability considerably.

Section 80CCG

Deduction under section 80CCG has been discontinued starting from 1st April 2017.

The Rajiv Gandhi Equity Savings Scheme was introduced in Budget 2012. This deduction was over and above the 80C deduction available to individuals

THEREFORE, the conditions under section 80 CCG for claiming deduction would be :–

  The gross total income of the assessee for the relevant assessment year should be less than or equal to ₹ 12 lakhs.

  The assessee should be a new retail investor as per the requirement specified under the notified scheme.

The investment should be in such listed equity shares or listed units of equity-oriented fund specified under the notified scheme.

The minimum lock in period in respect of such investment should be three years from the date of acquisition 

 Tax Benefit

The deduction was 50 % of amount invested in such equity shares or ₹ 25,000, whichever is lower. The maximum Investment permissible for claiming deduction under RGESS is Rs. 50,000. The benefit is in addition to deduction available u/s Sec 80C

Mr A, new retail investor, have made the following investment in equity share/units of equity oriented fund of Rajiv Gandhi Equity Savings Scheme for the Previous year 2012-13,2014-15 and 2015-16 as below :

Particulars	P.Y 2013-14	P.Y 2014-15	P.Y 2015-16
Investment in listed equity shares	₹ 15,000	₹ 42,000	₹ 30,000
Investment in units of equity oriented fund	₹ 45,000		₹ 12,000
Sale of all units of equity oriented fund purchased in P.Y 2013-14		₹60,000
Gross Total Income (comprising of salary income and bank interest)	₹11,50,000	₹11,75,000	₹12,25,000
Deduction under section 80 CCG	₹ 25,000	₹21,000	Nil
Remark	(Restricted to 50 % of ₹ 50,000)	(Restricted to 50 % of ₹42,000)	(Not eligible since GTI exceeding   ₹12,00,000
Amount liable to tax (on account of violation of condition)		₹ 22,500

Note :-  Since the deduction under section 80 CCG was not allowed during the P.Y 2015-16 on account of the Gross Total Income exceeding ₹ 12 lakhs, no amount relating to that year can be subject to tax in the P.Y.2012-15, being the year of violation of condition, even though the units were sold within 3 years. However a deduction of ₹ 22,500 (50 % of ₹45,000) was allowed under section 80 CCG in respect of investment of ₹15,000 in units of equity oriented fund in the P.Y,2013-14. Since such units have been sold in the P.Y. 2014 -15, the condition under section 80 CCG has been violated and ₹ 22,500 would be subject to tax in the P.Y.2014-15.