incme from house property

This query is : Resolved

CA Abhishek Singh (Querist)
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03 May 2009 dear all

one of our client has taken flat on rent. he has paid rs.200000/-as heavy deoposit & he pays only maintenance charges (rs.800 pm).

what will be the tax treatment ??

its urgent.

taxindiaconnect

taxindiaconnect (Expert)
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04 May 2009 The query is not clear that the deposit is interest free and refundable or not. what is the lease period. Please clarify if you want a good reply to this query, However presuming that the agreement is for five years and the deposit is interest free and not refundable the following conseqenses will follow -
The TDS should have withheld from 20 Lac at the time of payment, if not, you are an assessee in default u/s 201.
The entire 20 Lac will be devided by 60 months and a rent will be presumed in equal parts.
Notional interest will be levied and added to monthly rent
Rent expendirure will not be allowed to the your client as he has not deducted TDS.
TDS is required to be deducted on Maint. Charges if being paid to landlord.
Peanl provisions may follow.

Ca Anand Dubey

Ca Anand Dubey (Expert)
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04 May 2009 If that deposit (Rs. 2,00,000/-) is like "pagri" that will be capital expenditure for acquiring the right of tenancy and rs. 800/- can be treated as expenses

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