Interest deduction and rent tds

Mr X is a salaried person. His salary income is   5-6  lac  from employment. He has  house property which is rented out and has loan installment payment to bank.The  gross rent is below 1.8Lac. Is TDS have to be deducted so he can reduce rental income by interest payments on the property to arrive at Total Income. Can he still deduct EMI (interest only) from gross income even if TDS was not deducted.

Replies (3)

Deduction of tax at source is the responsibility of the deductor.. So you need not worry if TDS is not being made.  Also as stated by you the Rent is below the  threshold 1.80lacs so no TDS would be applicable.  From the Rent received on your property you would be eligible to get deduction of Municipal Taxes paid and on the balance s STd Ded of 30% can be availed. Also the amount of actual interest paid without any restriction can be availed.  After the deductions if there is a loss arising then the same would be set-off against the salary income.  If there is any income then the same would be added to the taxable income & tax would be calculated accordingly.

As the property is let-out the interest directly cannot be deducted from the taxable income whihc is done in case of self-occupied property.

Hi KUmar

 

The rent is below Rs.1,80,000/- so no need to deduct TDS and whatever Giridhar has said is perfectly correct.

Even he can claim Principal Amount paid on such loan as deduction u/s 80C (subject to limit of 1 lac & any other investment ).

See as far as TDS on Rent is concern , It is the Property of Mr. X , and he gave that on Rent basis. So Mr.X should not be bother about all this limit of 1.80 lacs. Criteria of 1.80 lacs is to be look after by the Tenant and not by the Owner. As per general sense of details provided by you , house propert must have been used by the tenant for his RESIDENTIAL Purpose. if so , then TDS is not at all attracted when services are used for the personal use.

Rest of things explained by Mr.Giridhar.

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