Advance rent received - taxability
This query is : Resolved
31 August 2010
Assessee received rent for a period of 2 years on a residential premises as advance. The Lessor paid the full amount of Rs 12 lakhs i.e. @ 50,000 rent per month and deducted TDS on full 12 lakh. This pertains to rent from Sep '09 to Aug '11. In this case assessee is not a person dealing in renting out of properties. This is the only let out property he is having.
My question is whether the assessee has to declare total 12 lakhs in AY 2010-11 itself or can he declare it year on year basis?
If he can declare year on year basis, then will the TDS deducted will also be claimed year on year?
Is there any specific section or case law relating to the above matter, please quote.
THANK YOU IN ADVANCE
My question is whether the assessee has to declare total 12 lakhs in AY 2010-11 itself or can he declare it year on year basis?
If he can declare year on year basis, then will the TDS deducted will also be claimed year on year?
Is there any specific section or case law relating to the above matter, please quote.
THANK YOU IN ADVANCE
31 August 2010
Since The Annual value of the property chargeable U/s 22 of the Income Tax act , the assessee can file year wise return and can claim entire tds in the year in which deducted.Excess tax deduction can claimed as Refund. Following year tax needs to be remitted.
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02 September 2010
There are,in fact, circulars and tribunal decisions that TDS can be spread over. On the contrary, cochin bench of tribunal did not allow to spread over TDS, whereas they said full TDS can be climed in the initial year itself irrespective of the quantum of income offered.
I am not citing those decisions, because that was a situation prevailed much before the introduction of form 26AS. Now, the observation of Mr. Arun can be followed at least to match the TDS figure with return and data base of department which may lead to mismatch of income inviting scrutiny. If that happens, the assessee has to prove the income mismatch with records ,to show that the reason for mismatch is advance rent,so as to escape from concelment of income.
I am not citing those decisions, because that was a situation prevailed much before the introduction of form 26AS. Now, the observation of Mr. Arun can be followed at least to match the TDS figure with return and data base of department which may lead to mismatch of income inviting scrutiny. If that happens, the assessee has to prove the income mismatch with records ,to show that the reason for mismatch is advance rent,so as to escape from concelment of income.
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