INCOME FROM HOUSE PROPERTY

Tax queries 2087 views 13 replies

 Hi

Is advance rent received taxable under head income from house property in the year of receipt.i.e., on cash basis

Municipal Value: Rs.120000

Fair Rental Value: Rs.150000

Standard Rent: Rs.100000

Actual Rent (monthly): Rs.8000 (Received for 14 months)

What is the GAV in this case?

Replies (13)

if advance is returnable, it is not taxable

ur question is not clear.

MV, FRV, SRV  amounts given by u are for 12 months or 14 months?

and whether the rent recieved for 14 months include advance rent of two months.whether it is returnable(i.e., as a security deposit) or it is rent recieved in advance?

GAV shld be calculated as follows

i) MV or FRV whichever is higher

ii) amount calculated in (i) or SRV which ever is lower.

iii)  {SRV-loss due to vacancy} or actual rent received whichever is higher

all the amounts should be calculated for the num of months for which rent is receieved

 

calculate accordingly

  advance is not to be considered 

advance rent cannot be rent received/receivable of the year of receipt - CIT v. Prince Rubber & Plastics [2004] 1 SOT 85 (Asr).

 

Originally posted by :CA Devanshi Gandhi
" advance is not to be considered

advance rent cannot be rent received/receivable of the year of receipt - CIT v. Prince Rubber & Plastics [2004] 1 SOT 85 (Asr).

"


there is sum difference between advance rent and rent recieved in advance....

rent receieved in advance is taxable in the year of receipt

GAV  =  Rs. 1,00,000 !!

Originally posted by : Harsh*t Aggarwal
" GAV = Rs. 1,00,000 !! "

it is correct only if the rent of 14 months include advance rent of 2 months and it is returnable to the tenant.

else it will be 1,16,667

Originally posted by : Harsh*t Aggarwal
" GAV = Rs. 1,00,000 !! "

it is because if the rent for xtra two months is taxable, MV, FRV, SRV also should be calculated fo r14 months.

SRV for 12 months = 1,00,000.

so for 14 months= 100000*14/12

1) non-refundable deposits will be included in rent received or receivable on pro rata basis

2)refundable deposits can not be included in rent  received or receivable, here point regarding notional interest should be taken into consideration 

3)advance is not to be considered 

advance rent cannot be rent received/receivable of the year of receipt - CIT v. Prince Rubber & Plastics [2004] 1 SOT 85 (Asr).

 
As tax is levied only on the income of the previous year,annual value of property, owned by a person during the previous year, is taxable in the following assessment year.

 

gav=100000

GAV will be Rs. 1,00,000

no need consider about the refundable advance received at any cost. at the point of view, advance rent received is taxable.


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register