22 May 2009
I am having a rental income of Rs.20 lacs P.A. I want to know do I need to maintain accounts as the cheque received from tenants is deposited in my personal accounts and I will use it for my persoanl use.How should I show the expenses incurred by me as there is standard deduction of 30% only my expenses will work out to around 50% of the rent like salaries, electricity , telephone , conveyance, etc.
22 May 2009
Income from property let out has to be shown under the head 'income from house property' for the purpose of income tax Act,1961. Allowable deductions are municipal taxes paid, 30% for repairs and interest on loan,if any, taken for construction. Law does not allow other expenditure like salary etc, mentioned in the query, for calculating taxable income under the head mentioned above. Maintenance of books of accounts is not compulsory for those assesses deriving income from house property.
23 May 2009
If your main business is letting out house property and earning income by way of that, then you can show income from from the letting out property under the head business or profession and can claim expenditure relating to such income, refer corresponding case laws.
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