Lease your Property and Get Tax Breaks.
The goverment is considering TAX SOPS for people to rent out vacant property.
Excerpts from Times of India :
GREAT EXPECTATIONS
Padma Ramakrishnan
The Times of India (Mumbai edition)
It will be a step in the right direction. The government is
studying a proposal to give tax relief on income from rent, from 30 percent to
50 percent, after allowing for deduction in property taxes on actuals. The move
is directed at bringing in more people to rent out, thus increasing the stock of
rented properties.
"Giving tax incentives on rental income will clearly
be an incentive for the landlord and tenant to get into such transactions,''
says Akil Hirani, Managing Partner, Majmudar & Company, a law firm. "There
will be more such leave and license transactions. Currently there is a tendency
to split the transaction into license fee and furniture fees, cash transactions
etc so as to escape taxes. This will bring in more transparency, as people will
come out with the real amount of license fee or rental income."
The
lease model is not common, he explains, save in a few cases, and as foreign
investors are entering the segment, there would be a whole number of investors,
builders and owners, interested on leasehold or REIT basis which will be a huge
shot in the arm for that segment. It signals good intention on the part of the
government. However it would have been better if the government proposes a tax
holiday on the net rental income, he adds.