Income from Rent

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Amin Jignesh (Querist)
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03 February 2009 Can any one clarify......

I have a property in mumbai, & i have sold the same to one private limited company. Now process to transfer a property to buyer is under process. During the period buyer agree to pay me some amount every month & then he will deduct the same from final amount already agreed between us( on transfer of property to his name)

he will pay me monthly amount after deduction of TDS( as per TDS % on rent )

how will i show the above in my computation of I tax ???? is it income from House Property or in next year the same is from Capital Gain ?????

Revert urgently......

Thanks in advance

Jignesh Amin

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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03 February 2009 It purely depends on your agreement. If agreement says that until the sale deed is made the rent will be paid - then tds is applicable and you have to show under rental income from property.

If the agreement says it is a part payment of the agreed sale proceeds then it willnot be taxed. In such case he should not deduct tax at source.

CA Suresh Choudhary

CA Suresh Choudhary (Expert)
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03 February 2009 In my opinion if the buyer deducting TDS it means he is treating it as rent & not the part payment of the sales consideration.

So go through the agreement entered.

VISHAL KUMAR SHAW

VISHAL KUMAR SHAW (Expert)
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03 February 2009 As per my opinion the amount paid in the nature of rent will be treated as Income from house property and all the provision related to that as per Income tax act will apply as the payer is deducting TDS.

if the buyer does not deduct the TDS then he is paying in advance the amount of sale proceeds.and in next year when the all the process relating to sale done then it will be treated under capital gain as the case may be.

hence pls follow the agreemnet.

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