Ideally, or from Income Tax or Housing Society perspective, Who should pay Maintenance for Rental Apartment ? Owner or Tenant? and Why? If Owner pays maintenance (rs 4000/month), then taking rent of 20,000 per month, actual income is 16,000/month, but Income Tax calculates 20,000 per month as income.
Pay Maintenance for Rental Apartment? Owner or Tenant?
I don’t think maintenance should be part of rent, it has to be paid by resident ( in this case, the tenant) to the society for upkeep/maintenance, similar to how the resident maintains her/his home. Income is only the rent part. Maintenance is not considered part of rent or house rent allowance. Technically rental should pay maintenance ,so owner will give tax only on rental income.
Income tax is not deducted automatically from rental income.. manually u have to fill income tax return ..so there u have to deduct all maintenance expenditure, pay income tax and maintain all receipts and records. In Mumbai & its surrounding areas, the owner pays the maintenance irrespective if the flat is vacant or rented. The rental amount that is quotes is inclusive of the maintenance charges.
The money you pay to owner is their rental income. The money can be divided like how ever you want, rent + maintenance+ etc. And the money they get as rental income they have to pay tax. There is no provision in the income tax Act to deduct maintenance charges from rental income. Apart from deduction of property taxes, income tax allows 30% deduction for taking care of all related expenses. It does not make any difference for tax calculations who pays the maintenance charges.
House owner gets 30% standard deduction on the net value (rent received/receivable – municipality tax – unrealized rent) of the house property while calculating tax. That is, tax is paid on net value – std deduction. Ideally, this amount should be spent by the owner on maintenance and repair of the house.
Your income will be 20000 pm and u will get flat 30% standard deduction on this, whether u pay or not, property tax, maintenance charges and all(govt doesn’t bother about it)So ur taxable income will be 20k-6k=14k pm .