Property

INTANGIBLE
TANGIBLE PROPERTY
PROPERTY

MOVABLE
IMMMOVABLE PROPERTY
PROPERTY

LAND BUILDING
 Rent

Means: Includes
any amount received or
receivable by the owner of land
any forfeited deposit paid under
or a building as consideration for Non- adjustable amount
a contract for the sale of land or
the use or occupation of, or the received in relation to building
a building.
right to use or occupy, the land or
building, and
EXCLUSIONS (Chargeable
under IFOS)
Amount included
Rent from lease of
in rent for
Rent from sub- a building
amenities, utilities
lease of a land or together with
or other service
building plant and
connected with
machinery
renting of building
 Amount chargeable

Higher of:
Exception: This fair market
principle does not apply
where fair market rent is
Fair Market Rent or actual rent
included in income of the
lessee chargeable to tax
under the head “Salary.
 Income of joint owners
Multiple ownership
Multiple ownership with shares individually with shares not
ascertainable individually
ascertainable

the property will be

Net rental income will be Each owner will pay tax on considered as being jointly
proportionately allocated such income as per their owned by an association of
to each owner. applicable rates. persons (AOP) and
Principal of AOP will apply
 NON-ADJUSTABLE
Deposit (NAD)

RULE 1: RULE 2: RULE 3:

Where “earlier amount” is

Where NAD (earlier succeeding amount as
refunded on termination
amount) is refunded to reduced by that portion
of tenancy And
NAD received from tenant is treated as rent: tenant on termination of of earlier amount which
“Succeeding amount” is
tenancy before expiry of was charged to tax is
received from
10 years treated as income and
succeeding tenant

No portion of NAD is charged to tax in TY in

chargeable in TY in which following 9 TYs in equal charged to tax in TY in which received and
it is received and proportion which refunded or subsequent 9 TYs in equal
subsequent TY proportion.
DEDUCTIONS ALLOWED TO PERSON
Repair
Allowance
Insurance
Premium

Ground Rent

Profit on money
borrowed
 DEDUCTIONS ALLOWED TO PERSON
Share in rent and Share in
Apperception in Value Paid/
Payable to HBFC or Banks

Return of capital to HBSC/Bank

Where the property is subject to

mortgage or other capital
charge

Rent Collection Charges

Legal Services
 DEDUCTIONS ALLOWED TO PERSON

Deduction for Irrecoverable Rent

An allowance equal to
unpaid rent is allowed
as deduction, where
Conditions:
reasonable grounds to
believe that unpaid rent
is irrecoverable.

All reasonable steps to

institute legal proceedings
Defaulting tenant has for the recovery of unpaid Unpaid rent was included in
Defaulting tenant is not in
vacated property or steps rent have been taken or IFP in the TY in which rent
occupation of any other
have been taken to compel there are reasonable was due and tax was paid
property of the person
him to vacate it grounds to believe that on it.
legal proceedings would be
useless
 DEDUCTIONS ALLOWED TO PERSON
If unpaid rent allowed as • the amount recovered is chargeable to tax in tax year of recovery
a deduction is recovered

Double Deduction is Not • An expenditure allowed as deduction under IFP is not allowable under
Allowed any other head

• A deduction not allowed under Section 21 under IFB is not allowed

DNA under IFP either

• A deduction allowed on accrual basis is added back in income if not

Unpaid Liability paid in three years following the year in which it was allowed as
deduction

Payment of Unpaid • Allowed as deduction if paid after having been added in income
Liability