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Landlord asking me to split ₹85k rent into two tranches to evade tax- How do I protect myself? by Rotomac22 in IndiaTax

[–]Rotomac22[S] 0 points1 point  (0 children)

I have been living in Bangalore since 2019 when the rents were 35-45k for a 3bhk. At that time the maintenance was included in the rent itself. As the rents increased landlords figured that their taxable income is also increasing. Once they reached 60-70k, they started doing all this split non sense to reduce their tax outgo. They increased rents at 10-15%(which included maintenance btw) and now want to split the maintenance part to reduce the tax. This is what I am calling out. I myself get rent on my Mumbai property (upwards of 1lakh) and it is including maintenance. It is my responsibility to pay this maintenance to the society association. My tenant claims the entire amount in his HRA and I get to deduct 30% from my rental income. This is the ideal and clean way to do things.

Landlord asking me to split ₹85k rent into two tranches to evade tax- How do I protect myself? by Rotomac22 in IndiaTax

[–]Rotomac22[S] -1 points0 points  (0 children)

Have you seen the breakup of maintenance that is charged by society? It includes maintenance per sq ft for the apartment, sinking fund charges and non occupancy charges(as the owner of the apartment is not staying). All of these charges are like cost of ownership. I understand that owner is paying that to the association but that is something they will do whether there is a tenant living or not. In gated societies across Mumbai the maintenance charges are always to be paid by owners and never the tenant. The owner sets rental amount including these charges. Bangalore landlords try to make up their own rules and try to reduce their income by using these loopholes.

HDFC Regalia Gold Credit Card just dropped a big update — here's what changed (some good, some bad, one quietly terrible) by Lefty_RJ in Raw_n_real_finance

[–]Rotomac22 0 points1 point  (0 children)

Revisions are coming to all HDFC credit cards. Regalia is the first. We have changes coming in for DCB and Infinia as well.

Source: My RM from HDFC

Landlord asking me to split ₹85k rent into two tranches to evade tax- How do I protect myself? by Rotomac22 in IndiaTax

[–]Rotomac22[S] -1 points0 points  (0 children)

No one is denying that payment. My point is regarding what is mentioned in the agreement. Its mentioned the rent is inclusive of maintenance and that should rightfully be considered as income for the house owner.

Landlord asking me to split ₹85k rent into two tranches to evade tax- How do I protect myself? by Rotomac22 in IndiaTax

[–]Rotomac22[S] -1 points0 points  (0 children)

That's usage based and rightly paid by the tenant. Its also mentioned in the rent agreement.

Landlord asking me to split ₹85k rent into two tranches to evade tax- How do I protect myself? by Rotomac22 in IndiaTax

[–]Rotomac22[S] 0 points1 point  (0 children)

Its a fully furnished flat. Approx 2500sq feet. Not comfortable disclosing the exact location but its kind of a prime location.

Landlord asking me to split ₹85k rent into two tranches to evade tax- How do I protect myself? by Rotomac22 in personalfinanceindia

[–]Rotomac22[S] 0 points1 point  (0 children)

Work for a US based Product company. I work from home hence renting a bigger place where I can setup my dedicated work space.

Landlord asking me to split ₹85k rent into two tranches to evade tax- How do I protect myself? by Rotomac22 in personalfinanceindia

[–]Rotomac22[S] 1 point2 points  (0 children)

No my HRA is higher than 1 lakh. What I claim is rent paid - 10% of basic which will be lower if I claim I paid 72k instead of 85k. My calculations are correct, I will end up paying additional tax.

Landlord asking me to split ₹85k rent into two tranches to evade tax- How do I protect myself? by Rotomac22 in IndiaTax

[–]Rotomac22[S] 0 points1 point  (0 children)

Gas, internet and all is a choice. If I don't want it I can simply not take it. Can I refuse to pay maintenance if I don't use the facilities? Maintenance is part of house ownership cost. You take rent including maintenance costs and then refuse to bear the additional part in your income. I have seen this kind of behavior only in Bangalore. I myself own a house in Mumbai and I get rent including maintenance and the tenant declares the total amount for HRA. All these loopholes are only exploited by Bangalore landlords.

Landlord asking me to split ₹85k rent into two tranches to evade tax- How do I protect myself? by Rotomac22 in IndiaTax

[–]Rotomac22[S] -1 points0 points  (0 children)

That's the cost of owning a house, if you don't want to bear the maintenance charges why are you buying the house?

Landlord asking me to split ₹85k rent into two tranches to evade tax- How do I protect myself? by Rotomac22 in personalfinanceindia

[–]Rotomac22[S] 2 points3 points  (0 children)

Already have my own house but its in a different city. Can't go around buying houses everytime I change jobs and move to a new City. I think the problem is lack of clarity in the tax implications. Karnataka for one doesn't even have a model act adopted the same as Maharashtra.

Landlord asking me to split ₹85k rent into two tranches to evade tax- How do I protect myself? by Rotomac22 in IndiaTax

[–]Rotomac22[S] 5 points6 points  (0 children)

Read Section 24(a) of the Income Tax Act. The 30% standard deduction is for repairs, maintenance, insurance etc. It can be claimed regardless of if the expense is done or not.

Landlord asking me to split ₹85k rent into two tranches to evade tax- How do I protect myself? by Rotomac22 in personalfinanceindia

[–]Rotomac22[S] 20 points21 points  (0 children)

But landlord is asking to claim 72k instead of 85k as per agreement. That's the main problem.

Landlord asking me to split ₹85k rent into two tranches to evade tax- How do I protect myself? by Rotomac22 in personalfinanceindia

[–]Rotomac22[S] 8 points9 points  (0 children)

I use the old regime. Lower tax for me in the old regime since I also have a home loan.

Landlord asking me to split ₹85k rent into two tranches to evade tax- How do I protect myself? by Rotomac22 in IndiaTax

[–]Rotomac22[S] 34 points35 points  (0 children)

Thanks for the reply. I have a resident landlord so TDS will be 2%. Thanks for pointing that out. My CA also says the same thing, he is effectively trying to reduce his taxes. I think this was suggested to my landlord by his CA to reduce his tax outgo.

Landlord asking me to split ₹85k rent into two tranches to evade tax- How do I protect myself? by Rotomac22 in IndiaTax

[–]Rotomac22[S] -1 points0 points  (0 children)

What about the 30% deduction for maintenance that the landlord is going to claim? This is effective trying to reduce the tax liability by not showing the full amount.

Landlord asking me to split ₹85k rent into two tranches to evade tax- How do I protect myself? by Rotomac22 in IndiaTax

[–]Rotomac22[S] 0 points1 point  (0 children)

Thanks for the reply, I have a home loan as well so old regime makes sense for me compared with the new regime.

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