Income from House Property

Tax planning and managing the House Property

Income Tax - The direct tax proposals of budget 2014 have been tax friendly. It is also worth noting that budget proposals have received the assent of President and now it is law of land under Indian Income Tax Act. It provides for tax advantage in the form of increased basic exemption limit for individuals by Rs.50K....

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Rental income – House property vs. Business income

Income Tax - Some fundamental tax questions never seem to go out of fashion, irrespective of numerous judicial precedents on the matter. One such matter is the taxability of income from renting of immovable properties (Land and Buildings). The Income can broadly fall under the following two heads of income in the Income Tax Act: 1. Income from [&helli...

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House Rent Allowance : Tax Saver For Salaried Person

Income Tax - House Rent Allowance (HRA) is generally considered as a part of salary component and is generally added in the salary structure to help the individual to save taxes. House rent allowance deduction is given under section 10(13A) of the Income Tax Act accordance with Rule 2A of the Income Tax Rules. If you stay in […]...

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How to calculate & report income from house property in ITR

Income Tax - In the income tax there are five heads to calculate and report income to department. One of those heads is Income from house property. Owning a house is everyone’s dream but with this dream there comes a responsibility to calculate tax on it. Let’s discuss about it. Question:1  What falls  under the House property? Answer: […...

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FAQs on Income from house property

Income Tax - Is rental income from sub-letting chargeable to tax under the head Income from house property? Ans: Rental income in the hands of owner is charged to tax under the head Income from house property. Rental income of a person other than the owner cannot be charged to tax under the head Income from house property....

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Tax Exemption on notional rent on second self-occupied house (Budget 2019)

Income Tax - While presenting interim Budget 2019-20 FM proposed to exempt the levy of income tax on notional rent on a second self-occupied house subject to It has been proposed to exempt the levy of income tax on notional rent on a second self-occupied house.  Currently, income tax on notional rent is payable if one has more […]...

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Rent Income and Tax Provisions

Income Tax - Tax on rental income - The rental income is added to the taxable income and tax liability is based on the tax slabs. Up to 30 percent of rental income can be deducted towards maintenance of the rented place and for payment of property tax etc....

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Income from Amenities forming Part & Parcel of Building taxable as House Property Income

Nirmala Zaverchand Shah Vs DCIT (ITAT Mumbai)  - The issue under consideration is whether amenities being part and parcel of building will be tax under head 'Income from house property’ or ‘Income from other sources’?...

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ITAT Allowed Deduction of Municipal Taxes on Area Not Leased Out

Dream Motels (P) Ltd. Vs ITO (ITAT Mumbai) - Dream Motels (P) Ltd. Vs ITO (ITAT Mumbai) The issue under consideration is whether treating municipal taxes paid is considered as a part of rent liable to be taxed u/s 23 of the act? ITAT states that, upon due consideration of factual matrix, the crystal-clear position that emerges is the fact that...

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Advance Towards Sale of Property for Commercial & Business Purpose Can’t be Treated as Deemed Dividend

ACIT Vs Jethanand Thakur Bakshani (ITAT Chennai) - The issue under consideration is whether the advance received towards sale of property falls within the meaning of commercial and business purpose and can be treated as deemed dividend without considering the true nature of the transaction?...

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Addition for Notional annual value of property/part of property held as stock-in-trade

Tata Housing Development Company Ltd vs PCIT (ITAT Mumbai) - Tata Housing Development Company Ltd vs PCIT (ITAT Mumbai) sub-section (5) to Section 23 has been inserted by the Finance Act, 2017 w.e.f. 01-4-2018, whereby notional annual value of property/part of property held has stock-in-trade has been brought to tax subject to conditions specified in the newl...

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Income from Lease Money or Rentals taxable as Business Income if it is Exclusive or Predominant Business of Assessee

PSTS Heavy Lift and Shift Ltd Vs DCIT (Madras High Court) - The issue under consideration is whether the income earned by the Assessees during the Assessment Years in question from letting out of its warehouses or property to lessees, is taxable under the head 'Income from Business' or 'Income from House Property?...

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Income from House Property’s Popular Posts

Recent Posts in "Income from House Property"

Income from Amenities forming Part & Parcel of Building taxable as House Property Income

Nirmala Zaverchand Shah Vs DCIT (ITAT Mumbai) 

The issue under consideration is whether amenities being part and parcel of building will be tax under head 'Income from house property’ or ‘Income from other sources’?...

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ITAT Allowed Deduction of Municipal Taxes on Area Not Leased Out

Dream Motels (P) Ltd. Vs ITO (ITAT Mumbai)

Dream Motels (P) Ltd. Vs ITO (ITAT Mumbai) The issue under consideration is whether treating municipal taxes paid is considered as a part of rent liable to be taxed u/s 23 of the act? ITAT states that, upon due consideration of factual matrix, the crystal-clear position that emerges is the fact that as per the […]...

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Advance Towards Sale of Property for Commercial & Business Purpose Can’t be Treated as Deemed Dividend

ACIT Vs Jethanand Thakur Bakshani (ITAT Chennai)

The issue under consideration is whether the advance received towards sale of property falls within the meaning of commercial and business purpose and can be treated as deemed dividend without considering the true nature of the transaction?...

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Tax planning and managing the House Property

The direct tax proposals of budget 2014 have been tax friendly. It is also worth noting that budget proposals have received the assent of President and now it is law of land under Indian Income Tax Act. It provides for tax advantage in the form of increased basic exemption limit for individuals by Rs.50K....

Read More
Posted Under: Income Tax |

Addition for Notional annual value of property/part of property held as stock-in-trade

Tata Housing Development Company Ltd vs PCIT (ITAT Mumbai)

Tata Housing Development Company Ltd vs PCIT (ITAT Mumbai) sub-section (5) to Section 23 has been inserted by the Finance Act, 2017 w.e.f. 01-4-2018, whereby notional annual value of property/part of property held has stock-in-trade has been brought to tax subject to conditions specified in the newly inserted sub-section. The amendment is...

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Income from Lease Money or Rentals taxable as Business Income if it is Exclusive or Predominant Business of Assessee

PSTS Heavy Lift and Shift Ltd Vs DCIT (Madras High Court)

The issue under consideration is whether the income earned by the Assessees during the Assessment Years in question from letting out of its warehouses or property to lessees, is taxable under the head 'Income from Business' or 'Income from House Property?...

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Tenant is Deemed Owner in case of Long Term Lease & Rent Taxable as House Property Income

Nahalchand Laloochand (P) Ltd. Vs. DCIT (ITAT Mumbai)

whether assessee is considered as monthly tenant or deemed owner of the premises u/s.27(iiib) read with Section 269UA(f)(i) of the Act and accordingly whether rental income is taxable u/s.22 as 'income from house property' or not?...

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Inseparable Renting of workstations in building with amenities taxable as other Income

M/s. Telekon Media India Pvt. Ltd. Vs ITO (ITAT Delhi)

when a building and plant, machinery or furniture are inseparably let out, then under Income Tax it will be taxable under head of house Property, business or other sources?...

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Rental income – House property vs. Business income

Some fundamental tax questions never seem to go out of fashion, irrespective of numerous judicial precedents on the matter. One such matter is the taxability of income from renting of immovable properties (Land and Buildings). The Income can broadly fall under the following two heads of income in the Income Tax Act: 1. Income from [&helli...

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No section 23 Addition of Notional Rent for Vacant Property

Empire Capital Pvt. Ltd. Vs ACIT (ITAT Mumbai)

The issue under consideration is whether the addition on account of notional rent in respect of vacant property is justified in law?...

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House Rent Allowance : Tax Saver For Salaried Person

House Rent Allowance (HRA) is generally considered as a part of salary component and is generally added in the salary structure to help the individual to save taxes. House rent allowance deduction is given under section 10(13A) of the Income Tax Act accordance with Rule 2A of the Income Tax Rules. If you stay in […]...

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No Section 263 invocation If AO taken One possible view out of Many

Electro Urban Co-Operative Credit Society Ltd. Vs PCIT (ITAT Kolkata)

PCIT’s action under challenge is not sustainable since the Assessing Officer had taken one of the possible views only in this factual backdrop. It is reversed therefore....

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Lease Income taxable as Business Income if property objective is income earning

Asset Investment Services Vs ACIT (ITAT Mumbai)

The issue under consideration is whether the lease income earned by the assessee is taxable under head Income from House Property or Income From Business ans Profession?...

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How to calculate & report income from house property in ITR

In the income tax there are five heads to calculate and report income to department. One of those heads is Income from house property. Owning a house is everyone’s dream but with this dream there comes a responsibility to calculate tax on it. Let’s discuss about it. Question:1  What falls  under the House property? Answer: […...

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Posted Under: Income Tax |

Maintenance service charges cannot be taxed as House Property Rental Income

DCIT Vs Jagatjit Industries Ltd. (ITAT Delhi)

The issue under consideration is whether the maintenance service charges is charged under head income from house property along with rent?...

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Nature of rent Income not changes merely for Agreement Type

Mahle Filter Systems Pvt. Ltd. Vs Addl. CIT (ITAT Delhi)

Mahle Filter Systems Pvt. Ltd. Vs Add. CIT (ITAT Delhi) The issue under consideration is whether A.O. is correct in treating the ‘rental income’ as ‘income from other sources’? The assessee has disclosed rental receipts from its factory building and after deducting 30% as per provisions of section 24 of the Act, income from house ...

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Rent income from mall- Income from business or house property?

CIT Vs Prestige Estate Projects Pvt. Ltd. (Karnataka High Court)

The issue under consideration is whether tribunal was correct in holding rental income received from Forum Mall should be considered as 'Income from business' and not 'Income from house property', though agreement between landlord and tenant contemplating relationship of landlord and tenant and as such it would partake character of rental...

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FAQs on Income from house property

Is rental income from sub-letting chargeable to tax under the head Income from house property? Ans: Rental income in the hands of owner is charged to tax under the head Income from house property. Rental income of a person other than the owner cannot be charged to tax under the head Income from house property....

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Eligibility of Interest on housing loan for double deduction

Interest on housing loan which was claimed as a deduction under section 24(b) [while computing income from house property] was also deducted by the assessee under section 48 [as cost of acquisition while computing capital gains from sale of such house property]....

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Tax Treatment of Composite Rent, Unrealised Rent and Rent Arrears

The Article covers following topics : Discussion on charging section i.e. section 22 with focus on meaning of various terms viz: Building Land appurtenant to a building Owner Deemed owner Property used for the purpose of business or profession Tax treatment of composite rent : Composite rent i.e. rent of building and charges for various [...

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Trust cannot claim Section 24(a) standard deduction against rental income

Improvement Trust Fatehabad Vs ITO (Exemptions) (ITAT Delhi)

ITAT do not find any merit in this ground of appeal of the assessee. Accordingly we hold that assessee trust is not eligible for standard deduction at the rate of 30% u/s 24 (a) of the act, out of the rental income chargeable to tax in the hands of the assessee....

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House Rent Allowance (HRA)

If you are a Salaried Employee then you must know about the HRA. The Term HRA stands for House Rent Allowance. Generally every employee receives a HRA from their employers as part of his salary package, in accordance with terms and conditions of employment....

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HRA Taxability & Section 80GG Deduction on Rent Paid

House Rent Allowance (HRA) is a common component of the salary structure. Although HRA is a part of the salary, unlike basic salary, is not entirely taxable. Subject to certain conditions, a part of HRA gets exempted under Section 10 (13A) of the Income-tax Act. The tax benefit on HRA is available only to a salaried individual who has the...

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House Property Remained Vacant – Check Out How to Calculate Your Income Tax Liability

Income Tax Act, 1961 allows only 1 house property to be declared as Self occupied while all others are compulsorily required to be declared as rented out. In case of Property which is let out there exists a concept of Deemed Annual Value...

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Performance Bonus not forms part of salary for HRA calculation

Sudip Rungta Vs DCIT (ITAT Kolkata)

Clause (h) of Rule 2A specifically provides that ‘salary’ includes dearness allowance, if the terms of employment so provede, but excludes all other allowances and perquisites. Accordingly, the performance bonus received by the appellant did not form part of ‘salary’ for the purposes of computing exemption u/s 10(13A) of the Act....

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All you wanted to know about Tax Exemption on HRA

Along with the rest of the country, the salaried class waits for the annual budget to be announced each year. They look up to the government to provide them with higher take home pay by way of increase in tax free income and lowering of tax slabs. They also look for some relief through savings options providing tax benefits. Sometimes the...

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Taxability under the Head ‘Income from House Property’

ncome from House Property covers the rent earned from the House property which is chargeable to tax. Sometimes, the owner may have to pay tax on 'deemed rent' in case the property is not let out or vacant. The income from house property would be taxable if it satisfies the following three essential conditions:...

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Claim Tax Benefit on HRA as well as Tax Deduction on Home Loan

For some people, the tax-planning season has just started. You know that house rent allowance (HRA) and the deduction related to home loan repayment can lower your tax liability. You will be pleased to know, in certain cases, you can avail tax benefits from both of these....

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Posted Under: Income Tax |

Property used for business cannot be treated as vacant for section 23

Ideal Hitech Engineering Equipment (P) Ltd. Vs ITO (ITAT Delhi)

We are of the view that the company having occupied the property for its own purposes, no notional rent can be added. It may be germane to mention here that this is the only property owned and occupied by the assessee as its registered office. It is not the case of the AO that the assessee company was having some other premises to have it...

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Notional rent cannot be charged on property legally not occupiable

Sharan Hospitality Private Limited Vs DCIT (Bombay High Court)

Since during the period the property was legally not occupiable and not occupied because the building in which property was situated was not given Occupancy Certificate (OC), therefore, issue for charging of tax on notional rental basis and the question of interpretation of section 23(1)(a) did not arise at all....

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All about Income from House Properties

Income from house property shall be taxable under this head if following conditions are satisfied: a) The house property should consist of any building or land appurtenant thereto; b) The taxpayer should be the owner of the property; c) The house property should not be used for the purpose of business or profession carried on by the taxpa...

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Computation of Income From House Property

INCOME FROM HOUSE PROPERTY Under the Income Tax Act what is taxed under the head ‘Income from house Property‘ is the inherent capacity of the property to earn income called the Annual Value of the property. This is taxed in the hands of the owner of the property. COMPUTATION OF ANNUAL VALUE This is done […]...

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Tax Benefits on Home Loan for Joint Owners

Income Tax benefits on Housing Loan for Joint Owner of Rs. 2 Lakh each Section 24(b) of Income Tax Act, 1961 (amended) Conditions for claiming Interest on Home Loan ↓ 1. Income Tax benefits on a joint home loan can be claimed by all the joint owners. 2. Ownership is required for joint owners i.e. […]...

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No addition of notional annual rent of unsold flats held in stock-in-trade

M/s. Kolte Patil I-Ven Townships, Pune Limited Vs ACIT (ITAT Pune)

M/s. Kolte Patil I-Ven Townships Vs ACIT (ITAT Pune) The issue in the present case is with respect to addition under the head ‘income from house property’ on the 32 unsold flats/shops by the assessee. It is an undisputed fact that assessee is in the business of Civil Engineers, Builders and Developers and had in […]...

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Depreciation on Office Premises assessed as House Property Income?

Shri Prashant Jayantilal Patel Vs DCIT (ITAT Mumbai)

Shri Prashant Jayantilal Patel Vs DCIT (ITAT Mumbai) The sole subject matter of present appeal is to adjudicate whether the assessee would be eligible to claim depreciation on certain premises, which although forms part of block of assets,has been let out during the impugned AY & earned certain rental income which has been assessed as...

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Warehouse Sub-Letting Rent cannot be taxed as ‘income from house property’

Sushil Tuli Vs ITO (ITAT Lucknow)

There are two pre-conditions for charging the income as income from house property under section 22 of the Act. Firstly, the assessee must be the owner of the property. Also, the property must not be occupied by the assessee for the purposes of his business or In other words, the property should be a residential property....

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Income Tax on Two Self-Occupied Properties

Owning a House property or any property is not without responsibility but paying House property Tax on it annually definitely is. Property can be of any nature i.e., For residential purposes or commercial all are taxed under the head of ‘ Income from House property’. Any property used for business purposes or profession is taxed [&hel...

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Posted Under: Income Tax |

Tax on income of Co-Op. Society from letting out of terrace

Citi Centre Premises Co-Op. Society Ltd. Vs ITO (ITAT Mumbai)

Citi Centre Premises Co-Op. Society Ltd. Vs ITO (ITAT Mumbai) The issue in dispute in that case as per the Para reproduced from the Tribunal’s order above is regarding rent received from Reliance Telecom and in that case also, the assessee claimed a deduction u/s. 24 (a) of Rs. 1.65 Lakhs being 30% of such […]...

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Need to introduce separate deduction for repayment of home loan in coming Budget

Home is a basic need of any person in addition to bread and clothes. With rising prices of houses, it is almost impossible for an average person to buy a house without borrowing for it either through housing loans or through loans from friends and relatives. In this article, I wish to point out why the government should take out the p...

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Taxability on Sale of Jointly owned House property & saving of tax thereon

It is very common that people use to purchase the house property (like flat, building etc) in joint name to ensure proper funding for the same and sometime for smooth succession thereof (e.g Generally husband and wife use to purchase property in joint name so that in case of death of any of the person […]...

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Addition for deemed rent of unsold flats cannot be made to Builder

M/s. Kolte Patil Developers Limited Vs DCIT (ITAT Pune)

M/s. Kolte Patil Developers Limited Vs DCIT (ITAT Pune) The issue in the present case is with respect to addition under the head ‘income from house property’ on the 32 unsold flats/shops by the assessee. It is an undisputed fact that assessee is in the business of Civil Engineers, Builders and Developers and had in […]...

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Machinery rent cannot be taxed as Income from House Property for TDS deduction under wrong head

Heritage Hospitality Ltd. Vs DCIt (ITAT Hyderabad)

AO’s opinion that since TDS made u/s. 194-I, incomes are to be assessed under head ‘income from house property’ can not be accepted. Moreover, even if assessee has let out property but, when the Memorandum of Association permits the business of letting out of properties as such, the income cannot be brought to tax as ‘income from ...

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Assessee can decide Self occupied & Deemed let out property for Taxation

Bipin Sureshchandra Mehta Vs ACIT (ITAT Mumbai)

The issue under consideration is whether the assessee having two properties has right to choose Self occupied and deemed let out property for the purpose of taxation?...

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ITAT disallows claim of interest on home loan by showing SOP as Let out

Shri Hitesh H Budhbhatti Vs ITO (ITAT Ahmedabad)

Shri Hitesh H Budhbhatti Vs ITO (ITAT Ahmedabad) The allowability of interest expenditure on borrowed capital for purchase of residential house under s.24 of the Act is in question. As per Section 23(2) of the Act, the gross annual value of the residential house shall be taken at ‘nil’ where such house is in the […]...

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Income Tax benefits of buying property jointly

Buying a house is a dream for millions of people in India. The government has provided various tax benefits to individuals to encourage them to buy a house property under the ‘housing for all’ initiative. One of the important things to note is that if the property is held jointly, individuals can receive additional tax [&helli...

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A relook at Income Tax changes applicable for A.Y. 2018-19- Part 1

Scrutiny Selection date is fast approaching for cases to be selected for the A.Y.2018-19 by 30th September, 2019.  The Finance Act, 2017 has made a slew of changes in various heads of income.  Though adequate care has been taken while filing return of income but the need arises to have a relook at the changes made […]...

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Income from Letting out space on terrace of building to mobile companies is Income from house property

Kohinoor Industrial Premises Co– operative Society Ltd. Vs ITO (ITAT Mumbai)

Kohinoor Industrial Premises Co– operative Society Ltd. Vs ITO (ITAT Mumbai) Undisputedly, the assessee has derived rental income from letting out space in the terrace of the building to mobile companies for installing their mobile tower / antenna. It is also a fact that the assessee has offered such rental income as income from house [...

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Rent from letting out shop rooms in mall taxable as Business Income

CIT Vs M/s. Oberon Edifices & Estates (P) Ltd (Kerala High Court)

Amount received by letting out the shop rooms in the mall is business income taxable under the head Profits and gains of business....

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How to Claim Deduction of Interest Payments on Home Loan of Under-construction House

A home loan must be taken for the purchase/construction of a house and the construction of the house must be completed within 5 years from the end of financial year in which loan was taken. If you are paying EMI for the housing loan, it has two components – interest payment and principal repayment. The […]...

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Income Tax on notional rental income in case of builders U/s. 23(5)

Builders generally as a matter of practice are not interested in leasing of such property (ies) hence even the department in most of the cases, did not invoke provisions of section 23 of Income-tax Act, 1961 (‘the Act’) to tax the notional income deemed to accrue on completed vacant property(ies) held as stock-in-trade by the builders...

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Tax Exemption on notional rent on second self-occupied house (Budget 2019)

While presenting interim Budget 2019-20 FM proposed to exempt the levy of income tax on notional rent on a second self-occupied house subject to It has been proposed to exempt the levy of income tax on notional rent on a second self-occupied house.  Currently, income tax on notional rent is payable if one has more […]...

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Posted Under: Income Tax |

Income from Terrace space let out to mobile companies is house property Income

Kohinoor Industrial Premises Co– operative Society Ltd. Vs. ITO (ITAT Mumbai)

The terrace of the building cannot be considered as distinct and separate but certainly is a part of the house property. Therefore, letting-out space on the terrace of the house property for installation and operation of mobile tower / antenna certainly amounts to letting-out a part of the house property itself....

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Income from House Property in a Nutshell

SECTION 22 – CHARGING SECTION ♣ Annual Value of Property consisting of any buildings or land appurtenant there to. Tax under this head is not levied on the rent of the property but it is on the capacity of a property to earn income, Hence the words used in the charging Section is “Annual Value”. […]...

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Inclusion of Notional interest on interest-free security deposit in computation of annual value u/s 23(1)(b)

DCIT Vs Moni Kumar Subba (ITAT Delhi)

DCIT Vs Moni Kumar Subba (ITAT Delhi) In the present case, the AO added notional interest on the interest free security for arriving at annual letting value. Since that was not permissible, the effect would be that such assessment was rightly set aside by the CIT (A) and the Tribunal. Therefore, the orders would not […]...

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Tax Aspects – HRA and Home Loan

Buying a home is a dream come true for many , but a bit of homework could reduce your tax liability enormously. Many of us are aware that interest on home loan enjoys tax benefits, but only few might know that House Rent Allowance, a component in your salary, could also be a big tax saver if it is combined with the home loan benefit....

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Your spouse can be a vehicle for tax savings

Your spouse not only helps you in meeting your social and personal but also helps you in saving income tax as well. There are certain tax benefits by way of which you can enhance you tax savings through your spouse. Let us discuss some of important provisions. Expenses incurred for your children As per the […]...

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Unsold flats held by builder as stock cannot be taxed as income from house property

O/o. Income Tax Officer Vs M/s. Arihant Estates Pvt. Ltd. (ITAT Mumbai)

ITO Vs. Arihant Estates Pvt. Ltd (ITAT Mumbai) In the case on hand before us it is an undisputed fact that both assessees have treated the unsold flats as stock in trade in the books of account and the flats sold by them were assessed under the head ‘income from business’. Thus, respectfully following the above […]...

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Deemed rental of SOP should be determined as per municipal ratable value

Smt. Rekha Singh Vs ITO (ITAT Jodhpur)

The house which is not having any actual rental income but self occupied by assessee should be determined as per the municipal ratable value. Accordingly, the matter is restored to file of the Assessing Officer to find out the municipal ratable value of the house for computing income u/s 22 of the I.T. Act. We direct accordingly....

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Tax Implications on House Property Income

Income Chargeable under the head house property Rental Income from a property whose owner is the tax payer is charged under the head Income from House Property. Rental Income from Subletting In the hand of the owner rental income received by him is charged under the head “Income from House Property” but if a tenant is […]...

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Taxation of Co-operative Housing Societies & Income Tax Return

In general the perception is that income of Co–operative Societies is not chargeable to tax and therefore many societies do not bother to take PAN No. & file Income Tax returns. This is a wrong perception since though certain types of income of CHS are exempt there are other incomes which are chargeable to Tax....

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Useful tips to save Income Tax in F.Y. 2018-19

Tax Planning is most important part of Finance Planning for Tax Payers In India especially for Individual and Salaried tax Payers. In this Article we are discussing some Tax Planning Tips mainly for Individual and Salaried tax payers by which they can minimise their tax burden for Financial Year 2018-19 or Assessment year 2019-20...

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Income From House Property – Issues, Case Laws, Assessment

Sections 22 to 27 of the Act deal with the subject of taxation of “Income from house property”. Section 22 : Annual value of property is taxable under the head “Income from House property”. Section 23            : Determination of ‘Annual value’ Section 24           : Allowable deductions from “Incom...

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Housing Loans Come With Twin Benefits

Various tax benefit available under the Income Tax Act 1961, would help house aspirers to go in for housing loans which were a bit costlier till now. Taking loans for housing needs also makes an economic sense as it offers income tax incentives and exemptions....

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Taxability of Income from Real Estate

Real Estate is an ever green investment option in India and it has always given good returns. It can be a residential or commercial property. Real Estate gives recurring income in form of rent and appreciation in value in case of re-sale. As it gives good return, so taxability of income earned from real estate too arise. Taxability of inc...

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Income from House Property- All you want to know

Rental income in the hands of owner is charged to tax under the head Income from house property. Rental income of a person other than the owner cannot be charged to tax under the head Income from house property. Hence, rental income received ...

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When Rs. 2,00,000 maximum interest deduction not available on SOP

We all think that we are eligible for Interest Deduction U/s. 24(b) up to Rs. 2,00,000/- on home loan taken for Self Occupied property. But many taxpayers are not aware that in some cases the deduction of Housing Interest on Self Occupied Property is available only upto Rs. 30,000/- instead of Rs. 2,00,000/-. In this article we have dis...

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Income Tax Benefits from House Property and Loan

Section 80C for Investment in Residential House Property and for payment of Principal amount – The Equated Monthly Installment (EMI) that you pay every month to repay your home loan consists of two components – Principal and Interest. The principal component of the EMI qualifies for deduction under Sec 80C....

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Deduction of Interest on Home Loan From House Property income

Section 24(b) of the Act allows deduction from income from houses property on interest on borrowed capital on Home Loan as under:- (i) the deduction is allowed only in case of  house property which is owned and is in the occupation of the employee for his own residence.However, if it is actually not occupied by […]...

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Interest on Home Loan on Self Occupied House –Tax benefits

If capital is borrowed for reconstruction, repairs or renewals of a house property), then the maximum amount of deduction on account of interest is Rs. 30,000 (and not Rs. 2,00,000)....

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Tax benefits you can avail by investing in an apartment

Most of us are aware of the tax deductions available for home loan principal and interest payments. However, tax laws for fully-constructed, under-construction, self-occupied and let-out apartments all differ from each other. Knowing the nitty-gritty of these tax laws can help you claim all the deductions you stand eligible for. Here’s ...

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Posted Under: Income Tax |

Taxability of second House under Income Tax Act,1961

People buy a second home for many reasons, which, inter-alia, include as an investment for capital appreciation; to use it as a holiday home; to get a regular stream of income by way of rentals; or to diversify their investment portfolio. However, it is important for an individual, who is planning to buy a second home, to understand the t...

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Posted Under: Income Tax | ,

House Rent Allowance (HRA) Taxability & calculation

Calculate your House Rent Allowance (HRA) exemption know HRA exemption Calculation Formula and download HRA Calculator in excel format for easy calculation of exempt HRA Allowance out of Total HRA received by Salaried Assessee....

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Posted Under: Income Tax |

Interest on Home Loan- Deduction U/s. 24(b) and in Computation of Capital Gain

Sh. Subhash Bana Vs. ACIT (ITAT Delhi)

Deduction under section 24(b) and computation of capital gains under section 48 being altogether different provisions, interest paid to bank for acquiring capital asset would be eligible as part of cost of acquisition, even if same had been claimed under section 24(b) while computing income from housing property....

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No exemption for one SOP U/s. 23(2)(a) if property was not occupied by the owner

Mrs. Kusum Lata Jain, Vs ACIT (ITAT Delhi)

This appeal by the assessee is directed against order dated 15/06/2012 of learned Commissioner of Income-tax (Appeals)-XXXI, New Delhi [in short ‘the CIT-(A)’] for assessment year 2007-08 raising following grounds...

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Rent received by Association of Co-Owners Whose only Objective is to Derive Income from Letting out of Property is Taxable as ‘Income from House Property’

Manek Lodge Properties Vs. Additional Commissioner of Income Tax (ITAT Mumbai)

Manek Lodge Properties Vs. Additional Commissioner of Income Tax (ITAT Mumbai) In the present case the assessee is nothing but association of co-owners of certain properties whose only objective is to derive income from letting out of property and nothing more. The bench also held that if the contention of Assessee is to be accepted, [&he...

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Maintenance charges deductible in ALV calculation of Let Out House Property

Krishna N Bhojwani, Vs. Asstt. (ITAT Mumbai)

Krishna N Bhojwani, Vs. ACIT (ITAT Mumbai) While calculating annual value of the let out property, maintenance charges paid to the society by the assessee is admissible deduction from the annual let out value under section 23(1)(b). Hence, disallowance made by AO was not justified. FULL TEXT OF ITAT ORDER IS AS FOLLOWS: The captioned [&he...

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Interest on home Loan availed of to repay earlier loan is allowable U/s. 24(b)

Akulu Nagaraj Gupta Subbaraju Vs. ITO (ITAT Bangalore)

If second borrowing has really been used to repay the original loan and this fact is proved to the satisfaction of AO, interest paid on the second loan would also be allowed as deduction under section 24....

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Building under construction cannot be taxed as deemed let out property

CIT Vs M/s. National Engineering Industries Ltd. (Calcutta High Court)

Building being under construction during relevant previous year, the same could not be taxed applying provision of Section 23(1)(c) of Income Tax Act, 1961. ...

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Renting A House? Here Is Your Legal Checklist

Renting a Property is always a difficult task for Landlord ..they always in dilemma that what are papers they need to collect from Tenant.Here are checklist of it....

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Posted Under: Income Tax |

Common Area Maintenance and non-occupancy charges paid are deductible from rent in computation of ‘Annual Letting Value’ u/s 22

DCIT Vs. Yogen D. Sanghvi (ITAT Mumbai)

Common Area Maintenance Charges and non-occupancy charges paid by the assessee to the Society are deductible from the rent while computing the Annual Letting Value u/s 22...

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Appropriate rate of interest for estimating ALV of Property let out without rent

ITO Vs. PASL Windtech (P) Ltd. (ITAT Ahemdabad)

In our opinion, for determining the income from the property, it should be rate of return on the investment of similar amount in another asset. Therefore, in our opinion, the Commissioner (Appeals) was fully justified in estimating the ALV on the basis of interest which assessee would have earned on the investment of the similar amount. ...

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Amenity charges forming part of same transaction is assessable as House Property Income

Prakash Datta Samant Vs. Assistant Commissioner Of Income Tax (ITAT Mumbai)

A bare perusal of nature of services, prima facie, reveals that the said services were of general in nature which is usually provided by the landlord to the tenant. Therefore, amenity charges, in our opinion, being part and parcel of same transaction, were asses sable as Income from House Property....

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Notional income on house kept vacant for self-occupation

Kusum Lata Jain Vs. ACIT (ITAT Delhi)

Annual value of a house could be taken as nil only when either the house is occupied for own residence or could not be occupied by the owner, if he is residing in a building not owned by him at other place due to his employment, business or profession carried out at other place....

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Compensation received for providing amenities is taxable as income from house property

Star Gold Pvt. Ltd. Vs. Dy. CIT (ITAT Mumbai)

Receipts towards amenities are to be considered as part of rental income. However, the expenses incurred towards security service and pantry services are not connected to the rental income and hence, they should be deducted from the receipts from amenities....

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Rental Income from Real Estate Business is Business Income

Income Tax Officer Vs. M/s Zever Tower Pvt. Ltd. (ITAT Delhi)

Moreover, if the action of the AO is confirmed the assessee will be claiming additional deduction u/s 24 @ 30% in addition to the business and administrative expenses as the assessee is in the real estate business and the income of the assessee will be assessed lower than the returned income. ...

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Service Tax Paid on rent can be claimed as deduction from business Income

The DCIT Vs. M/s. Chadha Builders & Properties (ITAT Delhi)

DCIT Vs. M/s. Chadha Builders & Properties (ITAT Delhi) Service Tax is not an allowable deduction from Income from house property. But it is true that the assessee has paid Service Tax & it was not recovered from tenants and it has also filed the return of service tax. Service tax has been paid into […]...

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Income from Leasing of Retail Space in Mall is Taxable as ‘Income from House Property’

Select Infrastructure Pvt. Ltd Vs. Addl. CIT (ITAT Delhi)

Select Infrastructure Pvt. Ltd Vs. Addl. CIT (ITAT Delhi) Here in this case, qua the retail space, the assessee was not carrying on any systematic or organized activity of providing service to the occupiers of the shops, albeit other service charges pertaining to the common maintenance, event and advertising, parking fees, etc., has been ...

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Brokerage, electricity, legal expenses not allowable in calculation of House Property Income

Ranjeet D Vaswani Vs The. ACIT-12(3) (ITAT Mumbai)

While calculating annual rental value for Income from House Property,  expenses like brokerage, electricity expenses, legal expenses and bank charges would not be allowed as permissible expenditures as these expenses are not covered under sections 23 and 24 of Income Tax Act, 1961 as permissible expenditure. Full Text of the ITAT Order i...

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House property Income cannot be assessed as business Income without valid reasons

Banzai Estates P. Ltd. Vs Dy. CIT (ITAT Mumbai)

Supreme Court in the case of Raj Dadarkar & Associates vs. ACIT [2017] 81 taxmann.com 193 (SC) has clearly held that in case the provisions of Section 22 are applicable the property is to be assessed as income from house property....

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SC on income from property: Is it is chargeable as house property Income or business income

Raj Dadarkar & Associates Vs. ACIT (Supreme Court of India)

merely because there is an entry in the object clause of the business showing a particular object, would not be the determinative factor to arrive at a conclusion that the income is to be treated as income from business...

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Rent for amenities if not separable from Rent is House Property Income

M/s. Sree Seshachala Builders Ltd. Vs Deputy Commissioner of Income Tax (ITAT Bangalore)

These appeals are preferred by the assessee against the order of CIT(A) on common grounds. Therefore, these appeals were heard together and are being disposed off through this consolidated order....

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S. 24(b) Interest on Loan taken to repay earlier Loan on property allowable

DCIT Vs M/s. Patton Developers Pvt. Ltd. (ITAT Kolkata)

Whether interest paid by assessee on loan taken for repaying the loan earlier borrowed for acquisition of the property is allowed as deduction u/s 24(b) of the Income Tax Act,1961?...

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Notional rent on security deposit cannot be considered to calculate annual value

Commissioner of Income Tax Vs. Jubiliant Enterprises Pvt. Ltd. (Bombay High Court)

Assessing Officer to delete the 12% interest charged by him, on the interest free deposit received by the assessee, to determine the ALV of the rented property ignoring the well settled judicial principle that what is important is the real nature of transactions in the relied on case supra and not the facts?...

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Remove proposed Restriction on set-off of loss from House property: ICAI

The Finance Bill 2017 proposes to insert sub-section (3A) in section 71 to provide that set-off of loss under the head Income from house property against any other head of income shall be restricted to two lakh rupees for any assessment year....

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Rent cannot be treated as other income for not recording construction expense in books

M/s. Ramairen Properties Pvt. Ltd. Vs Income Tax Officer (ITAT Delhi)

Construction expenses not recorded in books of account, cannot be a ground for assessing rental income under the head income from other sources when conditions of Section 22 of Act for assessing annual value of property have been fulfilled by assessee....

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Rent cannot be taxed in the hand of co-owner if his name is added merely to avoid succession problems in future

Shri Isola Srinivas Vs. Addl. CIT (ITAT Hyderabad)

Though the assessee is the sole owner of the property, he has included his wife and son as co-owners in the sale deed only to avoid succession problems in future and that they were also included as co-obligants in the loan agreement on insistence by the SBI to avoid legal litigation in future. ...

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Two Clauses that should be Removed from Finance Bill 2017

Article discusses two clauses of finance bill 1. Restriction on the Loss On House Property and 2. Penalty For Furnishing Incorrect Information In Reports Or Certificates which are detrimental to the economy, tax payer and the intermediary between the tax payer and the tax authorities i.e. the tax representatives....

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Budget restricts set-off of loss from House property to Rs. 2 Lakh

It is proposed to insert sub-section (3A) in section 71 to provide that set-off of loss under the head Income from house property"against any other head of income shall be restricted to two lakh rupees for any assessment year....

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Posted Under: Income Tax | ,

Top 4 Expectations of Common Man from Union Budget 2017

Since common man is directly affected by the income tax provisions every budget raises expectation levels of common man on this front. What the common man is expecting from finance minister this time? ...

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Posted Under: Income Tax |

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