In the present case the amount of Rs.12000 paid to care taker is not taxable as this is not an income but reimbursement of expenses.
Reg rental income tax with care taker
hello, I have given rent my house in Rs 15000. Now company to whom I given house, wants care taker with 12000 salary and they wanted to me have updated agreement with care taker and I can provide them bill of rent and salary of care taker and they will reimburse the amount paid to care taker . is any extra tax implication for me? Can I deduct the salary I pay to care taker and show rental income which is actual for house rent. Example if I get Rs15000 as hosue rent Rs 12000 for care taker from tanant company ============ Rs 27000 can I now after paying back Rs 12000 to care taker and show in my income tax return as rs 15000 which is actual income after paying salary to care taker? Please let me know if above deduction allowed for individual tax payee? thansk, Satish
Asked 8 years ago in Income Tax
BTW I am in 30% tax bracket and have home loan also and take deduction on interest after reducing rental income.
Asked 8 years ago
Dear Sir,
Yes you can show like you are providing manpower service and the receipt is straightaway paid to the Care taker. But instead I would advise you to take only your share of rent in your bank account and ask the Company to pay the Caretaker directly if you are not making any money on the same.
Trust this clarifies your query.
Feel free to get back/ call back in case of further details.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB - GEN, CERT. FAFP
Dear Sir,
In income tax act 1961, the reimbursement is not taxable. In your case the income chargeable under the head "Income From House property" (Section 22) will be 15000 As house rent. It is advisable to take amount for care taker in cash.Standard deduction will be allowed @ 30% From NAV.
Trust this clarify your Query.
For any other query please feel free.
Hi Rohit/Shiv, Thanks for reply. Yes I understand rental part (Rs 15000), I can deduct as per (Section 22). the clarification required on care taker salary part, I dont want to show myself manpower service provider.Since tenant is company they can give amount only on bank account/cheque not cash. So only as Individual Tax payer, if I give rent with care taker options with salary , deduction of RS 12000 is not allowed for care take salary part as its expenses ? Thansk, Satish
Asked 8 years ago
Dear Sir,
Where the value of other amenities such as Watchmen, sweeper, Gardner, etc. was provided by landlord to the tenant under a separate agreement , it was held that value of other amenities such as watchmen, Gardner, etc. are provided by the landlord under a separate agreement shall not be included while computing ALV u/s 23.
Though the assesses received composite rent , but the value of such amenities provided was a separately accounted for, and thus ALV should be determined excluding value of such amenities.
[DCIT V Sir Sobha Singh & Sons (P.) Ltd. (2014) 41 Taxmann.com 378 (Del) ( Trib)]
No problem. If it is reimbursement it is not taxable even if it is received by cheque
Dear Sir,
The matter under consideration is very litgious. I would advise you to prepare two separate agreement if possible and receive the amount in two installment provide two separate receipts.
There are favourable judgements available but need to maintain string documents as mentioned above.
Thanks and Regards,
CA Abhishek Dugar
Hello Satish,
As I said earlier, it is a litigative matter. If you ask me is it taxable, then the answer is NO. But if you ask me will the AO agree to it on the face then he may not and unnecessarily harass you.
So a precautionary step, if you are not making money out of the transaction then take a Direct Cheque in the name of the Caretaker.
Trust this clarifies your query.
Feel free to get back/ call back in case of further details.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB - GEN, CERT. FAFP
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