01 March 2008
One of our client is earning rent of Rs.120000/- p.a. from a shop. He is also paying interest on loal borrowed for the purchase of that shop Rs. 60000/-. How this be charged to tax & under which head. Is Standered deduction of 30% allowed? & whether Interest paid can be taken as deduction u/s 24? Please Reply. Thanks in advance.
01 March 2008
UNDER SEC 22 THE CHARGING SECTION, FOR ANY BUILDING,OR LAND APPURTNENT THERE TO,THE INCOME FROM SAME IS TAXED UNDER INCOME FROM HOUSE PROPERTY. SO YOU ARE ELIGIBLE TO THE DEDUCTIONS ALLOWED THEREUNDER. FIRST DEDUCT PROPERTY TAX PAID FROM ANNUAL RENT. FROM THE BALANCE DEDUCT,30% FOR STANDARD DEDUCTION. THEN DEDUCT FROM BALANCE THE INTEREST ON BORROWED MONEY. THIS IS THE NET INCOME FROM HOUSE PROPERTY CHARGEABLE TO TAX. R.V.RAO
03 March 2008
FROM THE INCOME FROM HOUSE PROPERTY REDUCE THE MUNICIPAL TAXES AND YOU WILL GET NET ANNUAL VALUE .FROM THAT AMOUNT DEDUCT 30 % AS STANDARD DEDUCTION.FROM THE BALANCE AMOUNT DEDUCT THE INTEREST PAID (WHICH IS MAXIMUM ALLOWABLE UPTO RS .150000/-.
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