house property

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This query is : Resolved

damodharan (Querist)

21 November 2008 my client has owned one commercial Complex last year . one Tenant made many problems to vacate our shop.from my client's building .After legal movement both persons made Memorandum of understanding as my client to pay Rs 1.25 lakhs to the tenant for vacate our shop.my client has paid the amount.by DD hence i request you to that this amount has been Claimable as a loss from house property income .it possible . & Tax treatement in any other

CA.ViVeK M ACA

CA.ViVeK M ACA (Expert)

21 November 2008 The compensation paid to the tenant is in the nature of capital. It will form part of cost of acquisiton of the property. loss cannot be claimed.

K V Subba Rao

K V Subba Rao (Expert)

25 November 2008 Municipal Tax, 30% flat deduction on the net annual rent and Interest on borrowed capital only else are expressely provided for Deduction from House Property Income.

30% flat deduction is intended to take care of Repairs & Maintenance and Collection or Recovery expenses and Depreciation etc.

Compensation Payment of Rs 1.50 lacs assumes the nature of 'application' of income similar to Notice period pay.

I am afraid, it is not possible to claim Deduction

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