Income from house property

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 May 2012 KIND ATTN. SIR

WHETHER SUB-LESSOR HAS THE RIGHT TO CLAIM DEDUCTIONS U/S 24 WITH REGARD TO REPAIRS @ 30% IN CASE OF LEASE PERIOD IS 15 YEARS THAN OR ELSE TO BE TREATED AS INCOME FROM OTHER SOURCES AND DEDUCTING THE LEASE RENT AS EXPENSE

KINDLY CLARIFY

WITH REGARDS

CA.P.SHANGAR

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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10 May 2012 The Sub lessor will be assessed under income from house property, the lease period exceeds 12 years.

he can very well claim the deduction u/s 24 @30%.

Querist : Anonymous

Querist : Anonymous (Querist)

10 May 2012 KIND ATTN. SIR

THANK YOU SIR , FOR YOUR TIMELY REPLY.

KINDLY CLARIFY WITH REGARD TO TREATMENT OF LEASE RENT PAYMENT TO LESSOR AND DEDUCTION U/S 24 WITH REGARD TO REPAIRS SIMULTANEOUSLY.

IN THE AFORESAID CASE , WHETHER TREATMENT WILL DIFFER FOR BOTH CLAIM SIMULTANEOUSLY.

WITH REGARDS
CA.P.SHANGAR

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CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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11 May 2012 Dear user,

The deduction u/s 24 @30% is the maximum deduction possible.

For rent paid, you can take the benefit u/s 10(13A) or u/s 80GG.

Thanks.

Querist : Anonymous

Querist : Anonymous (Querist)

12 May 2012 KIND ATTN. SIR

WITH REGARD TO SUB-LEASE, WE WANT TO CLARIFY AND TO DISCUSS AS FOLLOWS:

IF WE TREAT THE INCOME FROM SUB-LEASE AS INCOME FROM OTHER SOURCES , WE HAVE THE BENEFIT OF CLAIMING SUB-LEASE RENT PAID AS EXPENDITURE FULLY WITHOUT CLAIMING REPAIRS U/S 24.
ALTERNATIVELY, WHEN WE TREAT THE SUB-LEASE INCOME AS INCOME FROM HOUSE PROPERTY, AND CLAIMING REPAIRS @ 30% U/S. 24 AND WITH REGARD TO RENT PAID U/S 80GG , DEDUCTION FOR RENT PAYMENT OF RS.600000 COMES TO
QUALIFYING AMOUNT COMES TO RS.24000/-
AND FINAL TAX IMPACT UNDER THIS TREATMENT IS HIGHER WHEN COMPARED TO TAX CALCULATION UNDER INCOME FROM SUB-LEASE AS INCOME FROM OTHER SOURCES .KINDLY ADVISE.
WITH REGARDS
CA.P.SHANGAR

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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24 May 2012 Section 27 of the Income Tax Act provides that a person who obtains an immovable property on lease for a term of not less than 12 years shall be deemed to be the OWNER of the property for the purpose of computing income from house property.

In this case, since the lease term is for 15 years, the sub-lessor shall be treated as the deemed owner and the income from sub-letting shall be taxable under the head Income from House Property.

Accordingly, only standard deduction of 30% apart from municipal taxes shall be allowed.

Such income shall NOT be taxable under the head Income from Other Sources.