Rental income rules for govt employee
aman
(Querist) 17 July 2023
This query is : Resolved
Respected experts,
I want to know can government employee earn rental income by renting his house ..?
Specific query- Can a govt bank employee who have taken housing loan from his employer bank under staff scheme ,rent his house or use this house as hostel / PG and earn additional rental income ..?
kavksatyanarayana
(Expert) 17 July 2023
It is your house. You can use it for self or can rent it to tenants. But the income shall be shown in IT returns.
aman
(Querist) 17 July 2023
Dear kavksatyanarayana sir,
Rental income is an additional income and in mostly govt jobs we can not have additional income from any kind of trade or business ..
And making your house as hostel or PG is a kind of business as I have heard ..
And as per my query if any bank staff has taken housing loan under staff scheme and he has turned that house into hostel or PG then end use of property is changed automatically ..
kavksatyanarayana
(Expert) 18 July 2023
Whether he used it for rental to anyone it adds to his income.
T. Kalaiselvan, Advocate
(Expert) 19 July 2023
He is not conducting any business, he has just let out the property on rent to the tenant.
Moreover letting out the property for PG does not constitute that the bank employee is indulged in any business.
There is nothing wrong in letting out the property on rent even if it was constructed on the employees loan, there is no illegality on it.
Isaac Gabriel
(Expert) 20 July 2023
No doubt it is rental income and to be accounted for IT purpose.
Sudhir Kumar, Advocate
(Expert) 17 August 2023
Govt servant (including PSU/bank employee governed by identical provisions) is allowed to have income from
salary + overtime + honorarium +agriculture (which includes dairy / honey etc) + spouse pension + occasional fee + rent from property
setting up PG is himself entering into a business which is not allowed and can be reasons for disciplinary action.
Further more in this case you have taken a loan from employer for this dwelling unit without disclosing intention of running a PG business. This amounts to misuse of loan which is good a sufficient ground for major penalty.
