Solution needed with sections plz it is the question from CS test paper 2010 series:

                 An assesse used to file his return of income showing income from rent on receipt basis and was assessed accordingly up to the assessment year 2009 -10. During the financial year 2009-10 he received a sum of Rs. 1,00,000 by way of enhancement for the last 6 years as the Govt department   ( tenant) enhanced the rate of rent with retrospective effect, will the sum of Rs. 1,00,000 be taxable in the A.Y 2010 – 11? Can it be spread over the last 6 years? Is there any provisions of tax relief in such cases, like section 89(1) of the income tax Act, 1961? What are the provisions of the act governing such cases?

 According to me,

Section 145 has given the option to the assessee to offer the income from PGBP and IOS to tax on mercantile basis or cash basis. In house property income is taxed according to sec 28 i.e the charging section of house property. It is written there that income will be taxed on accrual basis only.

In the present case, Since the income has accrued in F.Y. 2009-2010 only therefore income will be taxable in A.Y. 2010-2011 only.

and relief u/s 89(1) will not be available because sec 89(1) is for salary only and not for IHP.

Total thanks : 1 times

 Dear Poornima mam

                          I guess sec 25B is applicable here as this seems to be arrears of rent...so 30% deduction is available for this and 70% will be included in calculation of house prop income

You are correct hareesh......

All the other provisions of I.T. Act will apply as they were applying before. 30% deduction is a part of computation of IHP and it will be allowed accordingly.

 Hareesh  

         Section 25B is regarding to arrears of rent. but i think present situation is not an arrear and on the other hand it is unexpected additional rent realised. so Section 25B cant be applied.

 Oki mam..i thought such amounts either come under 25A or 25 B...here the govt enhanced the rent in this financial year right..with retro effect....

ya the case is not of arrears and i agree that no such provision for HP as in salary so the amount would be taxable in the same year in which payment ias received.

i  agree with ritu,there w'll be no deduction and the amt will become taxable

hi...........

As per the provisions of the act,Rs.100000 is  taxable after granting of statutory deduction u/s.24 i.e. @ 30%........sec.89 relief is not available here since it is applicable only for salary income...............

QUERY REGARDING SALARY CERTIFICATE (16A)

WHETHER IN SALARY CERTIFICATE , IF EMPLOYEE IS HAVING ANY OTHER INCOME OTHER THAN SALARY, WHETHER IT IS MANDATORY TO  BE SHOWN IN 16A

PLEASE REPLY

THANKS.............