Monday, September 17, 2012
House rent directives has been issued by Inland Revenue Department in 2012 to collect effective tax from house owners. Government has taken measures to effectively collect tax on income from rent.
Do Natural person have to file tax return?
No, Natural persons do not have to file tax return as it is covered under section 92 final withholding tax.
Has the tax rate on rent changed?
The rate of tax on house rent is same as before which is 10% (ten percent).
Can Ghardhani (house owner) claim its expenses from house rent?
No, Natural person cannot claim expenses paid like property tax etc. from rent income.
Can Entity claim expenses?
Yes, entity is allowed to claim expenses, while submitting return which is compulsory.
Can we reduce rent to pay less tax?
Tax officer can do amended assessment of tax as per tax collected from similar property in similar locations, so we should pay proper tax on actual basis.
Do we need to keep any accounts also?
Not particularly but we have to maintain a book provided by tax office (Abhilekh pustika) for 4(Four years). The format is provided in IRD website or can be collected form tax service centers.
Does rent payer have to get PAN compulsorily?
Yes, Rent payer should get personal PAN as per directives.
What if in some months' rent is not received or received less than before what should we do?
Tax payer should immediately inform tax office by writing letter and note the darta number(Registration Number).
What more we need to do?
Taxpayers have to declare rental income and details of property should be provided as per annexure 1 of this directive(Abhilekh pustika)