Rental income

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 August 2017 I have installed a generator in bank on monthly rent basis. I have to bear all expenses, like oil expenses. They are paying me the rent on monthly basis.
AND TDS IS DEDUCTED IN WHOLE AMOUNT.
GENERATOR IS GIVEN ON RENT TOTAL TWO.
AND RENATL INCOME 20000 RS PER MONTH. TOTAL 240000. AND OIL EXPENSE 292250.
TOTAL 532250 INCOME AND ALSO 26 AS INCOME IS SHOWN 532250 RS. THEN HOW TO CLAIM TDS REFUND. TDS IS DEDUCTED ON 532250.
AND IN WHICH HEAD WHETHER PGBP OR OTHER SOURCE OR 44 AD .

PLZ TELL ME HOW TO CLAIM

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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05 August 2017 Show income in other sources...... & claim tds refund.

Anand

Anand (Expert)
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07 August 2017 1. You can show it as either Income from Business or Profits and Gains from Business or Profession. The selection of the head would depend on whether this can be considered to be your business or just a residual source of income. A practical consideration you can have, is that in case of Income from Other Sources you will have a lesser complicated return to be filled. The downside is that if you claim too many expenses against the income, then you may have a limited scrutiny on your hands.
2. You should show gross receipts of Rs. 5.32 lakhs because this amount is received by you and this amount has been shown in Form 26AS. If you don't do this again you may be asked to explain the difference between the 5.32 lakhs & the 2.40 lakhs.
3. If you show 5.32 lakhs as gross receipts, claim the expenses of oil reimbursement of 2.92 lakhs as a deduction and also claim depreciation for the generators. Depreciation can be claimed at 15% since this will qualify as plant and machinery.
4. I think tax would have been deducted at 2% on the gross income. Work out the tax liability accordingly and see what is the percentage of tax on gross receipts
5. 44AD is applicable only to Business Income so if you choose to follow this section you will be filing returns as Income from Business. 44AD mandates a profit of 8%/6%
on gross receipts. 6% if you have received all amounts by account payee cheques i.e. otherwise than by cash.
This in my opinion is always more beneficial than the other way of filing returns.

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