Download
1 / 13
130 likes | 277 Views
Carlyle’s Properties. Income from house property. ABC Ltd, a firm in financial consulting had rented top floor of its building which was a residential flat to Ashok for Rs. 1 lakh a year. Would this be income towards ‘house property’
E N D
Income from house property • ABC Ltd, a firm in financial consulting had rented top floor of its building which was a residential flat to Ashok for Rs. 1 lakh a year. Would this be income towards ‘house property’ • ABC Ltd, a firm in financial consulting had rented first floor of its building to Montaire Ltd. For running its office for Rs. 3 lakhs a year. Would this be income towards ‘house property’
Income from house property • ABC Ltd. had also rented a vacant land adjoining the entrance of the building to Montaire Ltd. For Rs. 20, 000 a year. The plot was used by Montaire Ltd. To park their cars. • ABC Ltd. had a vacant plot of land a Km away from its office premises. Montaire had taken this on lease for Rs. 30, 000 a year. This was used by their employees as a playground for playing football.
Income from house property Section: 22. Income from house property The annual value of property consisting of any buildings or lands appurtenant thereto of which the assessee is the owner, other than such portions of such property as he may occupy for the purposes of any business or profession carried on by him the profits of which are chargeable to income-tax, shall be chargeable to income-tax under the head "Income from house property".
Income from house property Section: 22. Income from house property By: Owner For: buildings or lands appurtenant thereto Amount: annual value Exception: Occupied for purposes of any business or profession carried on by him.
Income from house property Ashok had rented a flat in Mumbai to Soman for Rs. 1 lakh a year for 2002-03. This was the going rate for the flat. The flat fell vacant on April 1, 2003. It continued to be vacant for the entire period of April 1, 2003 to March 31, 2004. Thus, Ashok received nothing from the flat. To the contrary, he had to incur expenditure in repairs and painting. Would he have any tax liability towards income from house property?
Income from house property Arman had rented a flat in Mumbai to Sanat for Rs. 1 lakh a year for 2002-03. This was the going rate for the flat. Arman rented the flat to a friend Milan from April 1, 2003. As Milan was his friend, he charged him Rs 50, 000 per year. What would be Arman’s tax liability?
Income from house property Gopal had rented a flat in Mumbai to Mihir for Rs. 1 lakh a year for 2002-03. This was the going rate for the flat. The flat fell vacant on April 1, 2003. It remained unoccupied till November, 2003. Kartik took it on lease on 1 December, 2003. The monthly rental was Rs. 10, 000. Thus, during 2003-04, Gopal received Rs. 40, 000. What would be Gopal’s tax liability?
Carlyle Properties Property Income Head Property Income Head Annexe F5- Association Ground Floor F6- Sharone First Floor Vacant Land F1-Bank Advertisement Board F2- R &D Foundation F3- Dubey F4- Museum
Use of Flat for Business Purpose • Guest house for visiting employees • Store room for keeping records • Library for technical books for officers • Centre for display of products and information dissemination • Housing for MD • Housing for Foreign consultant • Recreation room for officers • Recreation room for officer and families • Housing for grade IV employees • Housing for Indian consultant • Recreation room for staff children
Head of Property • Roof top is leased for setting up an open air restaurant. • Roof top is leased for use as a helipad. • Roof top is leased for setting up solar water heater system. • Roof top is leased for setting up bill boards and advertising. • Roof top has solar water heater system which has been leased. • Roof top has bill boards which is being leased for use.
Ownership and House Property Hermit Office Plaza Ltd. Had built a 13 floored office complex. It had sold individual office units on different floors. It had retained the general management of the building, security, administration etc. It was charging the individual office units an amount for this function. In addition, it had an arrangement that the owner of an office unit could entrust the building to them and they would rent it out and maintain it for them. To this effect, an agreement was signed between Hermit Office Plaza Ltd. and an office Unit owner Mr. Gurbax Singh. Hermit Ltd. Rented the office unit for 7 lakhs per year to Soal Ltd. Hermit Ltd. spent Rs. 1 lakh in 2002-03 in repair and maintenance. Towards this account, it passed on 5.5 lakhs to Gurbax Singh. What should be the taxation heads for the two parties.
Ownership and House Property Hermit Office Plaza had a strange arrangement where it was not transferring the ownership of the office units but only giving them on a long lease of 99 years for a consideration of 1 crore. The person who had leased could further lease it temporarily or for good. Sandeep was one such person. He rented out his unit to a company for Rs. 8 lakhs per year. Sandeep says he is not the ‘owner’ thus, the income cannot be from house property. Hermit Ltd. Says that it may be the owner but there is no ‘annual value of property’, therefore there is no income from house property. Also, Hermit Ltd. Says it is in the business of developing properties. Decide.
