House Property - u/s 27.

Tax queries 1055 views 5 replies

swapnil

CA Final

598 Points Joined August 2010

note : u/s 27. if a person taken any property on lease for period of 12 years or more, than that person is consider to be deemed owner of this property.

my question is = if suppose i am taken a property on lease for the period of 13 years, than i am truly the owner of this house. i am sub-letting this house to immediatly for rent amt to Rs. 1,00,000 per month. than i am generating this income as "Income from House Propery". is it shown this income as H.P from starting of 1 st year or attempting of 12 th years.

and is it shown at H.P income from 1 st year and leaser has know this fact, than he can immediatly forfeited this lease agreement on basis of some escalation clause, what about this income.

my another quetion is if this lease agreement for 8 years, and i am sub-letting this house, than generated income is treated as income from other source, than which expenses shall i claim for deduction is it include property tax, insurance paid, legal fess, and other exp,

thanks 4 sharing with us, best of luck,

Replies (5)

Ramandeep singh

CA-final M.com (Final)

59 Points Joined December 2010

DEAR,

(1) The deemed owner also included in compution of income from house property u/s 22 to 26

so as per sec 27(iiib) if a person aquire property more than 12 years then he will deemed to be deemed owner of leased property

so your income of 13th year sub letting will be deemed to be income of house property

yes, the original owner can forfitted the agreement because the deemed limit is in only the IT ACT of 12 year not in ICA-1872

(2) Yes, if the leased property is sub let after 8 year, The income of it will be charged in other Income and the expenses only related to sub let is allowed

CA PARAS BAFNA

Practising CA

33428 Points Joined April 2009

In my opinion the concept for "deemed owner" applies from the day one on which lease agreement of 12 years or more is entered into.

The act does not tell about any contingency or escalation clauses. Since Section 27 is a deeming section, and it requires the lease period to be of 12 or more years ,( even 6years+ renewal right for further 6years or more.) then it is sufficient for the "deemed owner" to show his income under the head IFHP. As such till the agreement remained in force Income from the Lease Property has to be taken under IFHP.

siddharth jain

ca- ipcc

197 Points Joined May 2010

Originally posted by : Paras Bafna
	In my opinion the concept for "deemed owner" applies from the day one on which lease agreement of 12 years or more is entered into. The act does not tell about any contingency or escalation clauses. Since Section 27 is a deeming section, and it requires the lease period to be of 12 or more years ,( even 6years+ renewal right for further 6years or more.) then it is sufficient for the "deemed owner" to show his income under the head IFHP. As such till the agreement remained in force Income from the Lease Property has to be taken under IFHP.

agree with you sir!

Nabeel

3288 Points Joined April 2010

Originally posted by : Paras Bafna
	In my opinion the concept for "deemed owner" applies from the day one on which lease agreement of 12 years or more is entered into. The act does not tell about any contingency or escalation clauses. Since Section 27 is a deeming section, and it requires the lease period to be of 12 or more years ,( even 6years+ renewal right for further 6years or more.) then it is sufficient for the "deemed owner" to show his income under the head IFHP. As such till the agreement remained in force Income from the Lease Property has to be taken under IFHP.

agree!!!!!!!

Guest

Originally posted by : Paras Bafna
	In my opinion the concept for "deemed owner" applies from the day one on which lease agreement of 12 years or more is entered into. The act does not tell about any contingency or escalation clauses. Since Section 27 is a deeming section, and it requires the lease period to be of 12 or more years ,( even 6years+ renewal right for further 6years or more.) then it is sufficient for the "deemed owner" to show his income under the head IFHP. As such till the agreement remained in force Income from the Lease Property has to be taken under IFHP.

Agreed Sir.....