Property Income and Exemptions
Nuances of property income, including net annual value (NAV), rent income, and occupiers income. Learn about computation methods, repair allowances, exemptions under Sec. 11, and more.
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Presentation Transcript
INCOME FROM PROPERTIES
TYPE OF INCOME Net Annual Value (NAV) Rent Income Occupiers Income
Net Annual Value (NAV) To calculate the NAV conditions to be satisfied, Place for Resident When it's owner occupied on or someone else occupied on behalf of the owner
Computation of N A V Where the property is rated, Rating assessment/Annual value xxx Less: Allowance of 25% for repairs Net annual value (xxx) xxx
Points to be Noted 25% allowance for repair is deductible irrespective of actual expenses more or less. If rating assessment may not adequate, CRIR is empowered decide based on value on rent which may reasonably expected to be pay by a tenant. If it is used party for T,B,P or V, appropriate proportion have to be considered as NAV.
Exemptions for N A V (Sec 11) One Place of Residence House Constructed residential purposes If the House was Completed on or after April 01, 2008 oIf does not exceed 500 sq.ft. completed year and further four years used solely for the
Rent Income Computation of Rent Income Gross rent Less: Rates borne by the owner xxxx (xxx) xxxx Less: 25% of allowance for repairs (xxx) Net rent xxxx Higher NAV xxxx
Point to be Noted 25% of Repair Allowance is claimable if such expenses undertaken of to incur by owner , irrespective of actual cost. Net rent income have to be compared with NAV or Adjusted NAV. NAV have to be adjusted Net rent is not for a period of 12 months Certain months for which the property was vacant Certain months for which rent could not be recovered
Exemptions for N A V (Sec 11) House Constructed used solely for the residential purposes If the House was Completed on or after April 01, 2008 oIf does not exceed 500 sq.ft. completed year and four years
Conversion into Residential Units If Condition to be satisfied No exemption granted for income tax Converted in to two or more units Each unit is assessed separately Use for residential purpose Exempt for Income Tax for certain years
Exemption If floor area does not exceed 1000 sq.ft Converted year and 5 succeeding years If the floor area does not exceed 2000 sq.ft. Converted year and 3succeeding years
The profit from furnished house Rent received for letting Less: Rental Value of the house Gross Income for furnishing Less: any relevant expenses agent's commission upkeep of furniture Net profits from furnishing xxxx (xxx) xxxx (xxx) (xxx) xxxx
Occupier's Income Computation Net annual value Less: Rent paid by the occupier Occupier's income xxx xx xxx Occupier's income does not arise to Occupier occupies on behalf of his owner or on behalf of owner occupies in a house provided by an employer occupies in a trade, business, profession or vocation
