Income From Property

Saturday, January 11, 2014

Income From Property

The allowable deductions in respect of income from property are stated hereunder;


If the property is in occupation of te owner,or where it is let out to a tenant and owner has undertaken to bear the cost of repair.a sum equal to 1/5th of the annual value is allowed if deduction for repairs.This fixed allowance of 1/5th is allowable irrespective of the actual cost of repairs.

2)Insurance Premium

The amount of any premium paid during the year to insurance the property against the risk of damage or destruction is an admissible allowance.

3)Interest or Mortgage on Capital Charge

If the property is subject to a mortgage or other capital charge.The amount of any interest on such mortgage or charge is allowed as a deduction.

4)Loacal rate,tax.charge or cess

The amount of any local rates,tax,charge or cess which represents owner's burden and relates to property or income from property is allowable expenditure provided that it is paid to any local authority or government.

5)Ground rent

If the property is subject to a ground rent,the amount of such ground rent is an admissible deduction.


The amount of any interest payable on such capital as if borrowed for acquisitions,constructions.renovation or reconstruction of the property is an admissible deduction.

7)Land Revenue

Any sums paid on amount of land revenue is respect of the property is an admissible deduction.

8)Collection Charges

The expenses incurred in collecting are admissible are admissible as deduction up to a sum not exceeding 6% of the annual (after deducting the vacancy allowance ).Legal expenses incurred in recovering the unrealised rent can also be claimed within the above prescribed maximum limited.

Vacancy allowance

the amount equal to the portion of the annual value which is proportionate to the period during which the property remained vacant and for the parts of the property for which it remained vacant is an allowable deduction.

10)Unrelised Rent

Deduction is respect of unrealised rent is admissible if the following conditions are satisfied: a)The tenancy is bonafide; b)The defaulting tenant is not in occupation of any other property; c)The defaulting tenant has vacated the property or steps have been taken to compel him to vacate the property; d)All reasonable steps for the recovery of unpaid rent including legal proceedings have been taken:

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