Income tax on Rent receipt

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Quick Summary

If you receive rent via bank transfer, even without a formal TDS deduction, you are generally liable to pay income tax on it under the 'Income from House Property' head. To potentially avoid paying tax, you can explore tax-saving options. These may include claiming a standard deduction on the rent received and deducting any municipal taxes you've paid during the year.

sahil

sahil (Querist)

26 April 2020 Sirs, i have this question if someone can help. So, this is the scenario:
1) Rent agreement is for - 39,000 per month
2) Rent agreement is unregistered
3) Rent is received via bank transfer- 39,000 per month i.e. without deducting TDS
4) Owner is salaried
5) Tenant is not deducting TDS
6) Tenant is salaried and he is claiming HRA from his employer, but not giving owner's PAN (using someone else's PAN)
7) Tenant is mentioning
narration as "Rent" while doing NEFT transfer to owner

Question- Is owner liable to pay tax on rent received?
If yes, then how can owner avoid paying tax
Thanks in advance

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

27 April 2020 Yes owner is liable to pay tax on rent received. Avoid paying tax by tax saving.

CA Jitendra Daraji

CA Jitendra Daraji (Expert)

27 April 2020 Yes Owner is liable to pay tax on rent under the Head Income from House Property. He can claim Standard Deduction on Rent Receipt and also deduction of Municipal Tax paid during the Year

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