Dear Sir,

I inherited some Agriculture Land( rural
Land-more than 8 kms away from nearest Muncipality ) from my father, who had inherited from his father ( i.e. my Grand Father ). I sold this land in Apr 2009 and deposited the sale proceeds in our HUF Acct, which we have been maintaining since last about 10 yrs.In the past all income from Agr Land was deposited in this HUF Acct and shown in IT Return every year.
The HUF Acct is assessed to I.Tax regularly & has a PAN allotted.

2. Out of total amount a 1/3 rd amount was given to each of two NRI sons, who deposited the amount in their respective NRO Accts and then invested in Bank FDs for the time being. I took 1 Lakh and deposited in my SB Acct and then invested in Bank FD u/s 80C to avail the deduction for the current yr. I am a retired Army Officer.

3. My self & both my sons are tax payees, we file our IT Returns regularly and have been allotted PAN Nos.

4. My queries are--

a. Should the entire Sale proceeds be
shown in Income Tax Return of HUF Acct
or should we show these in individual
IT returns as per the amount given to
each individual ?

b. Should the amount given to each son &
taken by me be shown as share of
Capital receipt from sale of inherited
Agri Land or Gift from HUF or Loan
from HUF ?

c. Will the interest earned on FDs( made
out of these amounts ) of my sons &
myself, be shown as individual income
or will it be clubbed with income
of HUF Acct ?

d. Please indicate relevent Sec of I.Tax
Act, wherever applicable.

5. An reply will be appreciated, to enable me to finalise Advance Tax etc.

Thanking you in adavance and with warm
regards,

Sincerely Yours,
Major Bhupal Singh, Retd.

Here the issue is :
when in the case of a director using the accomodation provided by the company as perquisites which is ultimately of his family member then how can he be the tax saver being adding of Perx came to 15%.

E.g.
A,B,C,D are Directors having Family members X,Y,Z.
now if Salary of A is 25 Lacs P.a.
and Company takes house on rent from X for A at 6 Lacs p.a.
The perquisites to be added in A's income will be 15% of his Salary. i.e. 3.75 Lacs also X wil get the Net HP income as 4.2 Lacs (6 Lacs-30% Std Ded in HP Head).

But company can save only 6 Lacs being expenditure for Directors home.

The Ultimate effect are :

Company's income decreases = 6.00 Lacs
Director,s income increases = 3.75 Lacs
X's income increases = 4.20 Lacs
-------------
Ultimately increase
in income of the Group = 1.95 Lacs
===========
So now how can legally it may be turned in to some profitability operation being all this wil take place in next months...
Is there any way one can suggest to come out of this loss of 1.95 Lacs of the Group...


Kindly think twise before replying this question.... Thanks

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