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Standard deduction on house rent doubt

Sohil (Learner) (631 Points)

26 October 2011

My mother got last year 1 lakh rupee as rent from her property.

The article showed 30% deduction as actual rent received.

My question is it includes repair and maintenance charges
.

Our maintenance charge is somewhere around 1700 per month.out of which 900 somewhat is muncipal taxes.

I have a feeling that i must deduct 900*12 =10800 apart from the basic 30% charges.In short total deduction should be 40800 and not only 30000 rupees.

Reason being repair charges say in year was 27000 and other maintenance excluding muncipal taxes is say 8000.Still than i can only get 30000 total deduction.And sureshot everyyear i have to pay taxes.In short ill be paying taxes on more money than i am actually required to pay.

Am i correct in my calculations?

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7 Replies

Sanat kumar (Chartered Accountant) (265 Points)
Replied 26 October 2011

Hi Sohil,

Under Income Tax Act, while calculating the 'Income under House property' we have to follow the rules given u/s 22 to 27.

In this case, the income will be calculated as:

GAV: xxxx

Less: M. tax xxx

NAV: XXXX

Less: Standard deduction @ 30% of NAV xxx

Less: Interest u/s 24(b) xxx

Income under house property XXXX

Apart from these deduction, you can't claim repair charges from the rental income.

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Sumit Grover (Chartered Accountant ) (3652 Points)
Replied 26 October 2011

You r correct that you should be allowed deduction of municipal taxes as well. However...the income will be calculated as under

Rent received-------------------------------------XX

less: Municipal taxes paid--------------------(XX)

Net annual value(a)-----------------------------XX

less: Standard deducaion @ 30 % of (a)--(XX)

Less: interest on loan--------------------------(XX)

Income from house property------------------XX

2 Like

Sohil (Learner) (631 Points)
Replied 26 October 2011

Thanks guys even i found out it from the income tax site over here.

https://www.incometaxindia.gov.in/Archive/House_Property.pdf Page 25.

Calculation Actual rent received:: 100000

Muncipal taxes:: 10800

presnt value 89200

Standard deduction(30%) 26760

Income on which tax applicable 62440

Nabeel (CA) (3288 Points)
Replied 26 October 2011

Originally posted by : CA Sumit Grover
	You r correct that you should be allowed deduction of municipal taxes as well. However...the income will be calculated as under Rent received-------------------------------------XX less: Municipal taxes paid--------------------(XX) Net annual value(a)-----------------------------XX less: Standard deducaion @ 30 % of (a)--(XX) Less: interest on loan--------------------------(XX) Income from house property------------------XX

Mubin Panjwani (Investment Advisor) (23 Points)
Replied 15 December 2011

Now the Service tax on rental income from immovable property is come in from some time.

Now If I have rental income from property given on commercial use.. Income is Rs. 100000/- per month i.e. Rs. 12 Lacs per annum, then

Do I get the standard deduction of 30% u/s 24A?
As before I was not under the service tax net.. this property was treated like house property and rental income was shown in income from house property head with claiming std deduction.

Please help me as I think I may be totally messed in multiple taxes.

Panjwani

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jagjeet singh (accountant) (21 Points)
Replied 29 May 2012

HELLO SIR,

I AM LIVING A RENT HOUSE RENT AMOUNT RS. 6000/- PER MONTH MY HOUSE GROSS VALUE AROUND RS. 15,00,000/- I REAIR THIS HOUSE AT MY SELF & PAY FOR REPAIR RS. 1,10,000/- PLEASE HELP ME FOR CAL. MY DEBET AMOUNT IN INCOME TAX

THANKS

JAGJEET SINGH