Monday, Oct 18, 2004
Monday, Oct 18, 2004 |
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Q: I am living in a rented flat, while I have another flat which I had let out, since my own flat is not convenient for my occupation. The rental value of the flats, which I have occupied and which I have let out are more or less the same. I believe that I should not be liable for tax on the rent from the property, which I have let out, since I am not getting any financial advantage for any rent paid by me. If I had lived on my own property, there would have been no tax payable by me on account of rent. But I am advised that the law is different. If it were so, I should vacate my rented flat and occupy my own property to avoid tax. This does not make sense. A: The advice given to the reader is correct. Rent paid by the reader will not be set off against property income, which he gets by letting out his property. That is the law. There would be no liability to tax, if he had lived in his own house. There are many other similar situations in law offering options for the taxpayer to reduce his tax, but in most cases at some inconvenience, so that the tax that is paid is for better convenience. Those who are in receipt of house rent allowance can get benefit by way of deduction for rent paid subject to limits and conditions under Sec. 80GG, but it is available only for those individuals, who do not own a house in his place of employment. In fact, ownership of a residential property even by the spouse, minor child or joint family of which he is a member will lose the benefit of Sec. 80GG. After all, the law is not framed for any particular individual, so that like the juggernaut it rolls on. S. Rajaratnam
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