09 March 2014
I have a commercial property which i have rented out for 4,20,000 per annum (35,000 per month). Now, i read some report in yesterday's HINDUSTAN TIMES that 30% of rent income is deductible from tax.
Does that mean, TDS is to be applied only on 70% of the rent paid to me by a firm? OR TDS is applicable on complete income but i can claim 30% of it back? OR none of the above? :)
10 March 2014
1) From Total rent , you can deduct any municipal tax and after that 30% of this remaining income from house rent is fully taxable along with your total income in return.
Calculations: 420000 -20000( Municipal Tax, if it is paid in that Finacial year) ------------- 400000 --------------
- 12000 ( 30% of 400000) ------------------------- 288000 is taxable fully along with income. -----------------------
2) TDS YES, YOU SHOULD CALCULATE THE TDS ON THIS 2.88 LAKHS
CHANGES IN ABOVE CALCULATION ARE DONE.
The tax is deductable on net computed House Property income ( after deduction of 30% ) during the calculations of net taxable income.
Hence , we shall not consider the Tax liability for total rent of 420000/- received.
Anybody else if having any diffrent views on this , is welcomed.
10 March 2014
I am afraid this is not correct. 1. the calculation of 3.88 lacs is wrong. should have been 400000-120000=280000 2. Tax will be deducted on 420000.
CAclubindia
