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Time to re-think in changed times: Business head for activity of letting out properties to tax real income is most appropriate.

Time to re-think in changed times: Business head for activity of letting out properties to tax real income is most appropriate. - Income Tax - By: - CA DEV KUMAR KOTHARI - Dated:- 20-3-2018 - Present situation: At present in large number of cases ren .....

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hich provide computation of income in a notional manner. For example, even if property is vacant, notional rent can be taxable, repairs expenses are incurred on certain intervals, however standard deduction is allowed every year. There may not be any .....

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ions of small landlords, expenses, if any, may be incurred but not accounted for but standard deduction is claimed. Depreciation: The building suffers wear and tear due to lapse of time and use both. However, depreciation is not allowed when income i .....

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l income is not computed due to non-allowance of depreciation. Wear and tear replacement and renewals: Whether the building be used by owner or by tenants, it suffer wear and tear. Depending on use wear and tear will take place. For example in case o .....

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fashionable furnishing many items in a property require renewal and replacement frequently. Therefore, provisioning of depreciation to ensure replacement is necessary. Adventure in nature of commerce: Now-a-days it is not simple case of letting out .....

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in building and letting out is an adventure in nature of commerce. There are several risks involved in this activity. The activity is also a systematic activity involving: a. Decision making for investment in landed property. b. Selection of propert .....

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agreements with service providers in property and in relation to property like owners association, service for up-keep, maintenance, insurance etc. h. Up-keep, repair and maintenance of property, i. Municipal tax, GST and other tax and levies managem .....

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ning and letting out properties. Some of important risks involved are: a. Fall in price of property. b. Fall in rate of rent. c. Property remaining vacant. d. Risk of tenant being in trouble and disputes causing delay in rent realization and delay in .....

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