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 by a tenant from sub-letting cannot be charged to tax under the […]
Can interest paid on loans taken from friends and relatives be claimed as deduction while calculating house property income?
Yes, if the loan is taken for purchase, construction, repair, renewal or reconstruction of the house. If the loan is taken for personal or other purposes then the interest on such loan cannot be claimed as deduction.
Under which head is the rental income from a shop charged to tax?
To tax the rental income under the head “Income from house property”, the rented property should be building or land appurtenant thereto. Shop being a building, rental income will be charged to tax under the head “Income from house property”.
What is the tax treatment of composite rent when the composite rent pertains to letting out of building along with charges for provision of services?
In such a case, composite rent includes rent of building and charges for different services (like lift, watchman, water supply, etc.): In this situation, the composite rent is to be bifurcated and the sum attributable to the use of property will be charged to tax under the head “Income from house property” and charges for […]
What is pre-construction period?
While computing income chargeable to tax under the head “Income from house property” in case of a let-out property, the taxpayer can claim deduction under section 24(b) on account of interest on loan taken for the purpose of purchase, construction, repair, renewal or reconstruction of the property. Deduction on account of interest is classified in […]
What is the meaning of clubbing of income?
Normally, a person is taxed in respect of income earned by him only. However, in certain special cases income of other person is included (i.e. clubbed) in the taxable income of the taxpayer and in such a case he will be liable to pay tax in respect of his income (if any) as well as […]
Do any clubbing provisions exist in case of transfer of income without transfer of asset?
As per section 60, if a person transfers income from an asset owned by him without transferring the asset from which the income is generated, then the income from such an asset is taxed in the hands of the transferor (i.e., person transferring the income). E.g., Mr. Raj has given a bungalow owned by him […]
Do any clubbing provisions exist in case of a revocable transfer?
Revocable transfer is generally a transfer in which the transferor directly or indirectly exercises control/right over the asset transferred or over the income from the asset. As per section 61, if a transfer is held to be a revocable, then income from the asset covered under revocable transfer is taxed in the hands of the […]
Are there any situations in which the clubbing provisions do not apply in case of income from assets transferred to spouse?
The clubbing provisions of section 64(1)(iv) are not applicable in the following situations: If the transfer of asset is for adequate consideration; If the transfer of asset is in connection with an agreement to live apart; If the asset is transferred before marriage, no income will be clubbed even after marriage, since the relation of […]
Will any clubbing provision apply in case of transfer of asset to Hindu Undivided Family (HUF) by its member?
As per section 64(2), when an individual, being a member of HUF, transfers his property to the HUF otherwise than for adequate consideration or converts his property into the property belonging to the HUF (it is done by impressing such property with the character of joint family property or throwing such property into the common […]