Is 30% of rent income tax deductible?

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This query is : Resolved

Malay Manoj Lakhani (Querist)

09 March 2014 I have a commercial property which i have rented out for 4,20,000 per annum (35,000 per month). Now, i read some report in yesterday's HINDUSTAN TIMES that 30% of rent income is deductible from tax.

Does that mean, TDS is to be applied only on 70% of the rent paid to me by a firm? OR
TDS is applicable on complete income but i can claim 30% of it back?
OR
none of the above? :)

ALOK GOEL

ALOK GOEL (Expert)

10 March 2014 1)
From Total rent , you can deduct any municipal tax and after that 30% of this remaining income from house rent is fully taxable along with your total income in return.

Calculations:
420000
-20000( Municipal Tax, if it is paid in that Finacial year)
-------------
400000
--------------

- 12000 ( 30% of 400000)
-------------------------
288000 is taxable fully along with income.
-----------------------

2) TDS
YES, YOU SHOULD CALCULATE THE TDS ON THIS 2.88 LAKHS

CHANGES IN ABOVE CALCULATION ARE DONE.

The tax is deductable on net computed House Property income ( after deduction of 30% ) during the calculations of net taxable income.

Hence , we shall not consider the Tax liability for total rent of 420000/- received.

Anybody else if having any diffrent views on this , is welcomed.

regards

Sunil Kumar Gaur

Sunil Kumar Gaur (Expert)

10 March 2014 I am afraid this is not correct.
1. the calculation of 3.88 lacs is wrong. should have been 400000-120000=280000
2. Tax will be deducted on 420000.

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