Relief for house owners! No tax, if no rent, check ITAT ruling
In these difficult times of Coronavirus pandemic, many tenants are not in a position to pay their rents, however, owners of such houses have to face double loss—one in the form of rent and another in taxes
In these difficult times of Coronavirus pandemic, many tenants are not in a position to pay their rents, however, owners of such houses have to face double loss—one in the form of rent and another in taxes. Though many tenants have expressed their inability to pay their rent, but the fact remains that landlords need to pay their property tax.
House Rent and Tax
However, there is relief in store for them now. This will no more be the case. Yes, in a good news for landlords and owners of houses, Income Tax Appellate Tribunal (ITAT) Mumbai bench has given a verdict in favour of such property owners that applies across the country.
What this ITAT House Rent and Tax Order says
As per the order of ITAT, Mumbai, now house owners will only have to pay taxes on rent collected. It ruled that tax is only applicable when the rent income is actually received. It said if a tenant, who pays rent of Rs 10,000 per month to his landlord, chooses to pay only for 8 months of Financial Year 2020-21, then tax will be deducted on only those months. The landlord will not have to pay tax on the amount that he never got from the tenant.
House Rent and Tax: What I-T dept Cannot Do
“It is totally wrong on Income Tax department’s part to tax such properties for the rent of entire year, when the owner of such properties received rent partially,” said ITAT, Mumbai, in its ruling. As per the ruling, in this case, if an owner of such a house receives Rs 80,000 as rent for eight months, he will not be charged tax on remaining 40,000, the amount that he never received in FY 2020-21.
House Rent Tax Case
The ruling by ITAT Mumbai bench came on a matter pertaining to rent, where owner of such property was being taxed despite not getting full rent. Giving clear order in the matter, ITAT said if an owner of a house does not get rent for entire year, he/she should be taxed only on amount he received as rent.
ITAT House Rent Tax Order To Benefit Both
The order is likely to benefit both tenants and landlords as it ends chances of any dispute over rent.
See Zee Business Live TV Streaming Below:
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Power of Compounding: How soon will monthly SIP of Rs 6,000, Rs 8,000, and Rs 10,000 reach Rs 5 crore corpus target?
SBI Guaranteed Return Scheme: Know how much maturity amount you will get on Rs 2 lakh, 2.5 lakh, 3 lakh, 3.5 lakh and Rs 4 lakh investments under Amrit Vrishti FD scheme
SBI Senior Citizen FD Rate: Here's what State Bank of India giving on 1-year, 3-year, 5-year fixed deposits currently
SBI Senior Citizen Latest FD Rates: What senior citizens can get on Rs 7 lakh, Rs 14 lakh, and Rs 21 lakh investments in Amrit Vrishti, 1-, 3-, and 5-year fixed deposits
01:36 PM IST