income from house property

This query is : Resolved

CA Abhishek Singh (Querist)
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07 May 2009 dear all

one of our client has paid rs. 2,00,000(2 lac)to the owner of the flat as heavy deposit which is without interest & it is refundable after L&L period, . the agreemnt for leave & license is of 11 months. every month he is paying rs.800(approx)maintenance charges to the owner.

my query is will the tenant will be allowed deduction u/s.80gg of rs.800 pm?

what will be income for the owner ?

I HOPE MY QUERY IS CLEAR

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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07 May 2009 1. Tenant has not paid any rent to the owner as per L&L. For 80GG, tenant has to file Form 10BA specifying amount paid towards rent which is NIL.
HE WILL NOT GET DEDUCTION U/S 80GG.
2. Owner's Income would be computed u/s 23(1)
Reasonable Expected Rent(RER) (Higher of the Fair rent and Municipal Valuation of Property) and actual rent is compared for this purpose and would be taken as Gross Annual Value. (In such circumstances owner need not required to show maintenance as income as it will be most probably lower than the RER) other deductions like SD and Interest on Capital Borrowed available.

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