9911796707
TMI BlogIncome from House Property - Direct Tax Code, 2010X X X X Extracts X X X X X X X X Extracts X X X X ..... Income from House Property - Direct Tax Code, 2010 X X X X Extracts X X X X X X X X Extracts X X X X ..... se property shall be taxable under this head of income as per the DTC, even if the letting in the nature of trade, commerce or business. What is mean by "House Property". "house property" mean (a) any building or land appurtenant thereto; along with facilities and services whether in-built or provided separately; or (b) any building along with any machinery, plant, furniture or any other facility or services whether inbuilt or provided separately; [Section 314(119).] Based on the definition we can conclude that even factories are taxable under the head house property. Certain companies may have the business of letting their factory premises for rent which are now taxable under the head Income from house property and not under business in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come; hence they cannot claim deduction beyond 20% of rent receivable or received (Gross rent). Letting means Property that is leased or rented out or let. It is not defined in the code but in general it has this meaning. Certain property owners are receiving lump sum amount in the name of the lease of property instead of collecting rent, and this lump sum will be repaid after the period of tenure mentioned in the agreement if any entered. How this can be considered for income from house property. On what basis and how rent shall be computed for direct tax code. Still this is remains unsolved. When a property which is taxable under this head owned by two or more persons then if their shares are definite and ascertainable shall be computed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... separately for each of such person in respect of his share. When there is a dispute then it shall be computed as AOP The following are the properties which are not taxable under the head Income from house property: * To the house property, or any portion of the house property, which is used by the person as a hospital, hotel, convention centre or cold storage; and forms part of SEZ, the income from which is computed under the head "Income from Other Sources" * b. To a property which is not ready for use during the financial year. What is mean by "not ready for use"? It is up to the tax payer to prove that whether the property was ready to use during the financial year or not. More over the gross rent in respect of a house property or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any part of the property shall be the amount of rent received or receivable, directly or indirectly, for the financial year or part thereof, for which such property is let out. Hence if not let out we can say that it is not subject to tax. This benefit is not there in existing Income-tax Act, 1961. How to compute taxable income under this head. Particulars Amount (Rs) A Rent received or receivable, directly or indirectly, for the financial year or part thereof, for which such property is let out. XXXX LESS: B The amount of taxes levied by a local authority in respect of such property, to the extent the amount is actually paid by him during the financial year. XX C A sum equal to twenty per cent(20%) of the gross rent (A) XXX D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Any Interest on loan taken for the purposes of Acquisition, Construction, repair or renovation of the property or loan taken to repayment of first loan. XXX E Income/(Loss) from House Property XXXX Interest on loan which pertains to the period prior to the financial year in which the house property has been acquired or constructed shall be allowed as deduction in five equal installments beginning from such financial year The amount of rent received in advance shall be included in the gross rent of the financial year to which the rent relates. The amount of rent received in arrears shall be deemed to be the income from house property of the financial year in which such rent is received. This arrears of rent shall be included in the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal income of the person under the head income from house property, whether the person is the owner of the property in that year or not. A sum equal to twenty per cent of the arrears of rent shall be allowed as deduction towards repair and maintenance of the property. Self Occupied or Property which is/are not let out: If any property owned by the taxpayer had not let out during the financial year then he has to claim the interest on loan take for the house under section 74 (Tax incentives) and not under income from house property. The following conditions to be fulfilled to claim the same: - * Only Individual or HUF can claim under this section 74. * The house property is owned by the person and not let out during the financial year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... * The acquisition or construction of the house property is completed within a period of three years from the end of the financial year in which the loan was taken; and * The person obtains a certificate from the financial institution to which the interest is paid or payable on the loan. (Only loan taken from financial institutions are eligible to be claimed under this section) * The amount of deduction under this section shall not exceed Rs.1,50,000/- Exhibit- 1: Mr.Vimaal has the following six house properties out of which one of them are not ready for use as at 31.03.2013. The following are the details for the financial year 2012-13. The taxable income under the head Income from house property and /or deduction can be claimed sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be as follows:- Name of the Property Nature Gross Rent p.a. Interest on loan ** Taxes paid for the property Income/(Loss) From House Property Deduction U/s 74 Property # 1 Self Occupied Nil Rs.2,50,000 Rs.2,500 Nil Rs.1,50,000 Property # 2 Let out Rs.1,20,000 Rs.1,75,000 Rs.1,500 (Rs.80,500) Nil Property # 3 Let out Free of Rent Rs.1,85,000 Rs.3,500 Nil Nil Property # 4 Let out Rs.2,40,000* Rs.1,55,000 Rs.5,000 Rs.32,000 Nil Property # 5 Not Let out Nil Rs.1,86,000 Rs.2,000 Nil Rs.1,50,000 Property # 6 Not ready to use Nil Rs.1,98,000 Nil Nil Nil Total (Rs.48,500) Rs.3,00,000 *this tenant is not willing to pay the rent and the case is pending in court. ** From Financial Institutions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .
For your valuable comments: [email protected] X X X X Extracts X X X X X X X X Extracts X X X X
|
