Income from renting the leased property

Tax queries 507 views 6 replies

Shaikh Mohammed Wajid Ali

Manager Finance & Admin

54 Points Joined February 2010

Dear All,

Could any one explain under which head of income will the rental Income from the leased property will be taxable?

eg. Mr. A owns a building and leases to Mr. "X" for a period of 10 Years. for Rs. 30000/- per month i.e. Rs.3,60,000/- per year.

In turn Mr. "X" - Re-Rent the same property to Mr. "P" for Rs. 50000/- per month i.e. Rs.6,00,000/- per year.

Now:

1. what will be the taxbale income of Mr. A & Mr. X ?

2. Do Mr. P has to deduct TDS from the Rent payable to Mr. P and similarly Mr X should deducted TDS from rent payable to Mr. A?

Your immediate response on this will be highly appreciated

Thank you in advance.

Replies (6)

CA. Umesh kumar

ca.umesh11@gmail.com

1465 Points Joined October 2007

MR A is owner of house hence hence taxable under the head income from house property, For Mr X- taxable under income from other source

saurabh sawlani

Self employed

2193 Points Joined March 2018

In addition, Mr.P also deduct tds from the rent payable to Mr. X under section 194ib

Priya Kashyap

Student

7053 Points Joined February 2019

under head income from house property

Gaurav

SELF EMPLOYED

100 Points Joined February 2019

1. For Mr A it will be taxed under income from house property For Mr X it will taxed under income from other source 2. Mr. P will deduct tax while paying it to Mr X and Mr X will deduct TDS while paying it to Mr A

Abhishek Agarwal

article

55 Points Joined June 2015

both Mr.A and Mr.X will be taxed under Income from house property and can avail standard deduction under sec24a.
in this case income of Mr.A will be Rs.2,52,000 after standard dedn and Mr.X will be Rs.350000.

Alternatively

for Mr.X only
income can also be classified under Income from other sources and in this case Mr.x can deduct from rent income amounts of rent paid to Mr.A and Income will be Rs.240000 per year

Rent Payable is subject to Tds u/s 194ib as Rent income is more than Rs.1.8L per year (Now changed to 2.4 per year from FY 19-20).

Gaurav

SELF EMPLOYED

100 Points Joined February 2019

@ abhishek even if the limit was 1.8L still TDS would be deducted because the TDS provisions states that receiving rent from one person exceeds the prescribed limit TDS should be deducted. So after deduction his income is above or below the prescribed limit does not matter