TAXABILITY OF HOUSE PROPERTY LET OUT

Hi Rahul Rent is chargeable to tax under the head house property. Hence Rs 50,000 of rental income will be taxed under the head property. Deductions US 24 can be claimed. Since there is a separate agreement for maintainance, this will be treated as income from othet sources and taxed under this head, Neccessary expenditure incurred will be allowed a deducion while calculating this income.

Dear Rahul,

God one bhai........!

First lets remind ourselves that what is taxable under House Property is "Annual Value" which is computed after comparing actual rent with Fair market value n all....

So ur above decision to treat maintenance as separate Income may also back fire if FMV exceeds Rs. 1 Lac...becos House Property will be taxed at FMV + u have to show Rs. 50 k as additional income.

Secondly, for me it is a question of fact i mean if this thing is done just to claim expenses against those 50k then I dnt think that u have any chance to be listened by anyone

 otherwise if both agreements r genuinehaving regard to FMV OF RENT then "YES" maintenance contract will be treated as separate income.