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Advance deposit on property refund

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kavita raheja

45 Points Posted on 23 December 2020

if a person in 2013 -14 probably before rera act ... have bought property and paid some amount eg. more than 10 lakhs ... and builder was unable to complete the project after that ... and the person who paid the amount ... after years that is in 2020 is getting that amount refunded ... and the person was filling itr 1 earlier and now filing itr 4 .... what will be the impact .... and it's not sure that he will receive some interest on it or not ....

Replies (2)

Quick Summary

This discussion explores the tax implications for an individual who paid a significant advance for a property before RERA, with the project now delayed and the advance being refunded years later. The user is transitioning from filing ITR 1 to ITR 4 and is concerned about how this refund, and potential interest, will impact their tax return. The advice provided clarifies that the principal amount is not taxable, but any interest received would be taxed under 'income from other sources'.

Krishna Chaudhary

Accountant

4533 Points Posted on 24 December 2020

On receipt of principal amount there is no taxability, but if if interest is received on principal amount then it will be taxable under head income from other sources.