Income From Property

Question 1

Rent

Answer 1

• any amount received or receivable by the owner of land or a building against use of the land or building, and
• any forfeited deposit paid under a contract for the sale of land or a building

Question 2

Monthly rental of land or building

Answer 2

Taxable (higher of following)
- Actual rent received
- Fair market rent

Question 3

Adjustable advance

Answer 3

No treatment

Question 4

Non - adjustable advance

Answer 4

Taxable in 10 equal yearly installments.

However, if the tenancy changes hand then from the amount received from new tenant the amount already taxed in respect of advance received from previous tenant will be deducted. The figure arrived out as above will be taxable in 10 equal yearly installments.

Question 5

Forfeited deposit

Answer 5

Fully taxable in the year of receipt

Question 6

Exclusions from property income

Answer 6

• Rent received for the provision of amenities, utilities or any other service connecting with the renting of the building.
• Rent received in respect of the lease of a building together with plant and machinery.

Question 7

Deduction allowed under the head income from property (S.15)

Answer 7

a- repair allowance
b- insurance premium (related to building)
c- local rate , tax , charge or cess paid on property (excluding income tax)
d- ground rent paid or payable
e- interest paid
f- share in rent and share towards appreciation in the value of property
g- property is mortgaged
h- rent collection charges
i- legal charges
J- bad debt