Maintenance is a part of rent
If the owner and tenant agree that the tenant would pay the amount directly to the association, then it discharges the owner of his responsibility. In all fairness the same should be taken into account in computing the exemption under Section 10 (13A).
QI have taken a life stage pension plan from ICICI Prudential in September 2009 having a death benefit with zero sum assured which makes it a pure investment plan. I have surrendered the policy on April 2018 and received an amount of `11.14 lakh after paying a premium `7.2 lakh upto 2016 at rate of `96,000 a year. I did not claim IT rebate on the premium paid between 2009 and 2016. Please clarify if tax liability would be on the entire amount of `11.14 lakh received or `3.94 lakh that I received as dividend. FAHIM ASHRAF Via email
A) Your tax liability will be only to the extent of the difference between the amount invested (premium paid) and the amount received on maturity under the head “Income from other sources”. The premium paid is the amount invested in the pension plan which is out of your capital that is already taxed. Therefore only the amount received in excess of the investment made will be treated as your income in the year of receipt.
QI am a retired Air Force officer. I do not own a house. My wife bought a house in Hyderabad in 2017. Recently we shifted to this house. The Shamirpet Municipality asked for house tax to be paid. Since servicemen or exservicemen are exempted from paying house tax, we wish to apply for a change in the ownership from my wife’s name to my name. Please advise the procedure.
SQN. LDR. (RETD) S.P.C. MOHAN Via email
A) Where an asset (other than house property) is transferred to the spouse by an individual otherwise than for adequate consideration or in connection with an agreement to live apart, the income arising from such asset will be included in computing the total income of the individual.
Thus, it is to be noted that if the house property is transferred by an individual otherwise than for adequate consideration to the spouse, the provisions of Section 27 relating to “Deemed Owner” will apply and in that case, the transferor individual will be deemed to be owner and the income, if any, will be accordingly computed under the head “income from house property”. If the property is self occupied, the annual value will be nil and no tax liability will arise.
QMy son is working in a multinational company in Bengaluru. He pays rent to the flat owner and maintenance charges to house owner’s association. His employer refuses to consider maintenance charges while calculating rebate in rent stating that IncomeTax Act mentions rent only. Is there a way out for this? Y. GROVER Via email
A) Maintenance charges are normally paid by the owners of the flat to the association. If the owner and tenant agree that the tenant would pay the amount directly to the association, then it discharges the owner of his responsibility. In all fairness the same should be taken into account in computing the exemption under Section 10 (13A). However, all controversies can be set at rest by including such maintenance charges as part of rent paid in the rental agreement itself.