Income tax

Querist : Anonymous (Querist) 27 November 2009 This query is : Resolved
Sir,

We want to sublet part of our property. For that we have to pay subletting charges to midc, can we deduct this charges while computing income from house property.

I also want to know that from his propery we are doing business and brokerage paid for renting of part property can be deducted from business income or from income from house property.

Can u advice and give any case reference.

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A V Vishal (Expert) 27 November 2009
No, as per the Income Tax Act only a standard deduction @ 30% is allowable on the Net annual value apart from Interest on loan towards construction u/s 24 of the said act.

I also want to know that from his propery we are doing business and brokerage paid for renting of part property can be deducted from business income or from income from house property: The reply to this query is negative.

adv. rajeev ( rajoo ) (Expert) 27 November 2009
for the part of LOP ( let out property) u can claim 30% deduction on the NAV and for the interest on loan u can claim the deduction.
u cannot claim any deduction.

Vineet (Expert) 03 December 2009
Yours is a case of subletting as it appears from the query that you are merely a tenant in the property and not the owner. Therefore the income from subleting shall be taxed under Income from other sources and you are entitled to get deduction from such income for each and every expense related to such income without any limit. So you can claim the sub letting charges paid to MIDC as deduction against this income.

As far as brokerage paid on such sub-letting transaction, the same cannot be claimed against business income but the same can be claimed as deduction against sub letting income.

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